Apple shares clawing back, after $638 billion in value is destroyed
Ahead of the markets opening on April 8, 2025, Apple stock has inched into positive territory after Trump's tariff announcement knocked the entire value of Visa or WalMart out of the company.
Apple stocks over the last month, shown on an Apple Watch
Apple has continued to be punched by Trump's tariffs, despite claims its inescapable price rises could be a lower than expected. On its third consecutive market day, Apple was further hit by the news of a 104% tariff on everything it imports from China.
The continued impact for Apple came despite the overall stock market doing better on this third day. According to CNBC, of the major technology firms, only Apple, Microsoft, and Tesla were down again on April 7.
Describing it as a "rout," CNBC says that this downdraft has wiped out $638 billion from Apple's market cap, exclusively because of Trump's tariffs.
This means that in three market days, Apple has lost more than the value of Visa or Mastercard, and close to the value of Walmart. Its drop is greater than the combined value of Coca-Cola and Home Depot.
If Apple had spent the money instead, it could have bought Samsung 2.7 times over. Or it could have bought its historic rival, IBM, thrown in McDonald's and PepsiCo, and still had some change left over.
What's happening now
In overnight trading, though, Apple shares rose by 1.22% to $183.67. While the market has been extraordinarily volatile -- rebounding on rumors, only to crash again -- it's possible Apple saw a benefit from a report that it may import more iPhones from India.
This goes against Trump's stated aim of bringing manufacturing back to the US. But given the cost of such a move, the years it would take, and the lack of skilled labor in the States, reshoring iPhones to India could be the best of the options available to Apple.
Such a move would expose Apple to lower tariffs -- or at least it would at present. With tariffs able to be doubled on Trump's word, there is no more way for Apple to be certain of getting lower tariffs than there is for it to avoid them at all.
Apple's entire supply chain is vulnerable
Apple is particularly vulnerable to the tariffs as while US firms and consumers may now be paying double for goods imported from China, Apple is more dependent on that country than most. This is despite billions of dollars being spent over many years to cut down on its over-reliance on China.
Consequently, while pre-market trading has seen the first even slight rise for Apple, it is a rise from an extraordinarily low point. CNBC calculates that over the first three market days since the tariffs were announced, Apple shares have lost 19% of their value.
While Apple is facing having to pay 104% more for goods imported from China, the rest of its supply chain is impacted as well. Absolutely every country that Apple relies on for manufacturing is seeing radical increases in costs.
That includes the US, as despite TSMC manufacturing processors for Apple in Arizona, those chips need imported materials and are also finished in Taiwan, until the AMKOR finishing plant comes on line.
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Comments
Apple will survive, but profits and the stock price have a long ways to fall.
I think you’re both right. It will be a rough patch for Apple and everyone else, but I can think of nobody better to deal with this chaos than TC & Co.
China forced Google to leave but I don't see China hit Apple directly. Instead local apps could "decide" not to be available on iOS. My bet is on China soon finding a problem with Tesla causing a massive recall. Musk is simply too easy a target. American brands won't have an easy time in China but Tesla could go first.
EU will move the war to services from early next week. With Apple being responsible for 0.009% of all jobs in the EU there is nothing for the EU politicians to be worried about. EU politicians are to be elected in 2029 = they have plenty of time.
The market will remain extremely turbulent until there is some sort of equilibrium reached but no one has blinked yet in this staring contest.
I've seen people in the financial industry speculate that the S&P 500 will bottom out somewhere around 4500. That sounds far more plausible than Apple bottoming out today.
And the White House's newly increased 104% tariff on China has not yet kicked in (it happens at midnight tonight I believe). And I don't see the White House backing off anytime soon based on who is sitting at that desk in the Oval Office.
Today I bought a small amount of an inverse S&P 500 fund. I wager that the market isn't done exploring bear territory.
OTOH, it is possible China decides a show of readiness is needed, and the blockade might get out of hand, as there are some not very smart people in charge of some firepower that would be best not to test. No one, including Apple, survives that. A short, victorious war is just what Trump needs to cement his dictatorial power, suspend elections, continue the in-progress fascist overthrow of the rule of law.
We laughed at "Apple is doomed" comments; not so damn funny right now.
So I think it's almost inevitable that China will blockade Taiwan. Taiwan will then realize that the US is unable/unwilling to save it, and will likely yield to China without the need for a full scale invasion. Why starve to death to save your democracy when Putin has already managed to destroy the greatest democracy in the world? The Taiwanese might logically conclude that all hope is lost.
The sad thing is that people have been making this error for well over three decades and is often pointed out when it occurs. I guess it just goes to confirm the level of financial literacy on the Internet, sad when it's someone with over 10 years here at AppleInsider.
Makes one wonder how much online people are understanding and retaining these days.
Oh well...
Anyhow I'm sure Siri With Apple Intelligence will prevent people from making these sort of typos when Apple releases it. Right?
Apple has healthy income to buy stock back, which can keep the price higher.
A recession requires real world impact to GDP and employment levels and nothing indicates this at this stage. CEOs are obviously concerned because their remuneration is in large stock awards that will be taking a hit but that's not the case for the people who keep the economy running.
It's speculators' overreaction that is tanking stocks just now. If they cut down on the caffeine, cocaine and gambling behavior, they would be a bit more patient and wait to see what the real world impact is. It could all get resolved next week for all anyone knows.
While Apple is a very visibly traded stock, most of the share volume is from the big boys: fund managers, BlackRock, FMR, Vanguard, CalPERS, etc., not your coked-up playboy investor types, little Aunt Millies, or snotty fanboys on Reddit with three shares.
And it's not just Apple that's tanking, it's the entire market. Speculative gambling types simply don't have the capital to move global markets that much. Yes, they can muck around with one minor company like GameStop but not the entire S&P 500, Nasdaq Composite, Russell 2000, FTSE, DAX, CAC, Nikkei, HSI, etc. Remember that the safety locks kicked in and stopped futures trading on the Nikkei 200 the other day. It's not just a handful of spastic gamblers doing this.
It's worth pointing out that the Russell 2000 has gotten hit harder YTD than the S&P 500. The small caps and mid cap companies are getting clobbered far more than the Apples, Nvidias, Alphabets, and Amazons of this world. Hell, even DELL, HPQ, and HPE share prices have been brutalized way more than AAPL as a percentage drop YTD.
India's central bank just cut their interest rates by 25 basis points as new tariffs kick in. There's no coke-snorting gambler fraternity who drove that decision.
Anyhow tomorrow (Wednesday April 9, already on the East Coast) is going to be another tricky day for the market. We live in especially interesting times.