By Reuters
What happened :
Apple shares dipped almost 3% in premarket trading on Friday after CEO Tim Cook flagged $900 million in tariff-related costs for the current quarter. The news came alongside Apple’s decision to trim its share buyback program, adding more weight to investor concerns amid ongoing Sino-U.S. trade tensions.
Why it matters
The iPhone maker, which manufactures over 90% of its products in China, is scrambling to minimize tariff fallout by accelerating its production shift to India. Analysts are calling India Apple’s “life raft supply chain” as the company builds a stockpile to ensure most devices sold in the U.S. this quarter are not China-made.
Despite the blow, the $900M hit is less severe than many feared — offering mild comfort after a turbulent earnings call.
What’s driving the concerns
- Trade war impact: Washington’s looming tariff expansions are shaking global tech. Apple (Apple shares) is now bracing for what might be its costliest quarter in terms of trade-related headwinds.
- Slower AI adoption in China: Apple is already facing tough competition from domestic players like Huawei, who’ve been faster to launch AI-powered features.
- Buyback pullback: Apple’s move to scale down share repurchases signals caution — and adds to investor unease.
Market context
- Apple shares have fallen 15% year-to-date.
- By comparison, Meta is down 2.3%, while Microsoft is up almost 1%.
- Apple’s forward P/E ratio stands at 27.63, trailing Microsoft’s 28.64 but ahead of Meta’s 21.48.
Zoom out
Big Tech peers are riding the AI wave. Microsoft, Alphabet, and Meta all posted stronger-than-expected earnings thanks to AI-led growth. In contrast, consumer electronics firms like Qualcomm, Samsung, and Intel are heavily reliant on consumer spending and have posted weaker forecasts.
Bottom line
Apple is trying to pivot fast and shield itself from geopolitical shocks. But investors are watching closely, asking the billion-dollar question: Can India really replace China in Apple’s global growth engine?
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