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Apple is under economic stress. Not due to technological setbacks or a lack of demand, but due to political decisions. New US tariffs on imports from China are hitting the company hard. Analysts view the situation critically. This is also reflected in the fact that the research firm Wedbush has significantly lowered its price target for Apple shares. This is a clear warning signal for investors, consumers, and market observers.
Apple is considered a robust company with a stable stock price and a strong market position. However, even this tech giant is not immune to global economic risks. Tariffs and trade conflicts, in particular, can have a major impact. That's exactly what's happening now. Wedbush has lowered its price target for Apple shares from $325 to $250. The reason: Production in China makes Apple particularly vulnerable to the new US tariff measures.
Apple is hit particularly hard by tariffs
According to Wedbush, Apple is more affected by the new US tariffs than any other comparable company. The main reason: approximately 90 percent of iPhones are manufactured in China. If new tariffs are imposed on these imports, Apple's costs will rise significantly. In a recent report, the analysts refer to this as a "tariff economic Armageddon." By this, they mean an economic situation that could hardly be worse for Apple.
Production in the USA? Unrealistic and expensive
Wedbush firmly rejects the idea that Apple could simply relocate its production to the US. According to her calculations, it would take around three years and approximately $30 billion to relocate just 10 percent of iPhone production to the US. This would still mean that 90 percent of the devices would be produced in China – and would therefore remain subject to tariffs. Furthermore, even if Apple were to bring all production to the US, many problems would remain. Rare earths are needed to manufacture processors. These raw materials are scarce in the US, so they would still have to be imported – which would also be subject to tariffs.
iPhones would become significantly more expensive
If Apple were to attempt to manufacture in the US, this would have a significant impact on prices. Wedbush predicts that costs would rise so sharply that it's hard to imagine how Apple could absorb this additional burden. Profit margins would come under massive pressure, either driving up prices for end customers or significantly reducing margins for the company (via WedBush).
Uncertainty on the market
Another problem is uncertainty. Wedbush emphasizes that the announcement of new tariffs will cause consumer hesitancy worldwide. People are hesitant to make major purchases because they don't know what's coming economically. This also weighs on sales of Apple products like iPhones. The analysis report speaks of a potential "destroying of demand."
Services as a source of hope
Despite the difficult situation, Wedbush isn't completely negative. They see Apple's services business—such as iCloud, Apple Music, or the App Store—as a long-term growth driver. Therefore, they're still setting a price target of $250, even though that's significantly below their previous target.
Review of previous reviews
In December 2024, Wedbush's price target was also $250. At that time, the assessment was still optimistic. Analysts expected strong holiday sales around the iPhone 16. Later, in December 2024, the price target was raised to $325 – primarily due to expected growth impulses from new Apple Intelligence features. This positive assessment has now been withdrawn.
Tariffs could fall again – but when?
Wedbush believes it's possible that the tariffs will be lifted at some point, or that Apple will be exempted. In that case, they would raise their price target back to $325. They didn't give a specific estimate of how likely this is. However, they expect the current tariffs to remain in place for "a few more months."
US tariffs put Apple in a difficult position
Apple is currently facing a particularly difficult market situation. The new US tariffs are hitting the company hard because iPhone production is heavily dependent on China. A quick solution is not in sight. Relocating production to the US is hardly realistic and would incur enormous costs. At the same time, higher prices could cause demand to collapse. While the services business remains a stable factor, Apple will face massive challenges in the short term. As an investor or technology enthusiast, you should monitor the coming months closely. The situation is serious – and this is also reflected in the significantly lowered price target. (Photo by Unsplash+ / Getty Images)
Disclaimer: No recommendation for investments
This article does not constitute financial or investment advice. The information contained herein is for journalistic and informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.
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