Wedbush slashes Apple price target on tariff impact
By Michele Maatouk
Date: Monday 07 Apr 2025
(Sharecast News) - Wedbush slashed its price target on Apple to $250 from $325 in a note on Sunday as it argued that tariff uncertainty "turns the supply chain upside down" for the tech giant.
"The tariff economic Armageddon unleashed by Trump is a complete disaster for Apple given its massive China production exposure," it said.
It said that no US tech company is more negatively impacted by these tariffs than Apple, which produces and assembles 90% of iPhones in China.
"We have seen Apple navigate very uncertain times in the supply chain during Covid...but for the stock it was feasible for investors (and us) at the time to look past March or June 2020 quarters and understand and value what normalised 2021 earnings could look like as normalisation would happen," Wedbush said.
"This tariff situation is dramatically different and a very scary prospect as the current tariff slate with China at 54% and Taiwan at 32% would be devastating to Apple, its cost structure, and ultimately consumer demand....it's not a debate in our view."
It noted that Apple has become the most successful consumer products company in the world and most valuable with an installed base of 1.5 billion iPhone users and 2.4 billion iOS devices.
"The innovation and designs mastered in Cupertino are built in manufacturing facilities in China with Foxconn producing iPhones, iPads, Macs, AirPods, and other hardware devices that Apple has sold to consumers globally with many in the US.
"While Apple has diversified its supply chain to other parts of the world including Vietnam, India, and the US...the hearts and lungs of the Apple supply chain are cemented in Asia."
Wedbush estimated that the vast majority of iPhone production is out of China, over 50% of Mac products, and 75%-80% of iPads.
It pointed out that Apple has already announced a $500bn investment in the US along with Trump in February. It said the reality is it would take three years and $30bn to move even 10% of its supply chain from Asia to the US, with major disruption in the process.
"For US consumers the reality of a $1,000 iPhone being one of the best made consumer products on the planet would disappear," it said. "It speaks to our point that if consumers want a $3,500 iPhone we should make them in New Jersey or Texas or another state....the concept of making iPhones in the US is a non-starter in our view at $1,000.
"Price points would move up so dramatically it's hard to comprehend and the near-term margin impact on Apple's gross margins during this tariff war could be mind boggling for this US tech stalwart."
Wedbush maintained its 'outperform' rating on Apple, saying it remains bullish for the long-term view as the services business and strong free cash flow support a base case valuation of $250.
"Our bear case is $160 and bull case (tariffs removed or exempt) is back to $325," it said.
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