Wedbush says Apple is hit worst by tariffs because 90% of its iPhones are assembled in China
Analysts at Wedbush say that Apple’s iPhone is the piece of technology hit the hardest by Trump’s tariffs, and has lowered its price target by a whopping $75 as a result.
Wedbush has been raising its Apple stock price target on the expectation of growth because of Apple Intelligence. In December 2024, the price was raised to $325, but it has now been cut back to $250.
In a note to investors seen by AppleInsider, Wedbush analysts described the current situation facing Apple as a “tariff economic Armageddon,” and “a complete disaster.” It bases this on how 90% of iPhones are assembled in China, which Wedbush says means Apple is more affected by the tariffs than any other comparable firm.
Compared to previous issues such as COVID, Wedbush says those were uncertain times, but this is now a “very scary” situation that is devastating to Apple. Its analysts dismiss the idea of Apple moving production to the US, estimating that it would take three years and $30 billion to move even 10% to the States.
Consequently, Wedbush says that making iPhones in the US would push the price up “so dramatically [that] it’s hard to comprehend.” With the cost of moving manufacturing, plus the problems of insufficient skilled labor in the US, Wedbush says the short-term impact on Apple’s margins would be “mind-boggling.”
Wedbush is basing this on its estimate of the cost of moving 10% of manufacturing to the US, which would still leave 90% exposed to tariffs.
Even then, even with 100% of manufacturing being done in the States, Apple would still be exposed to tariffs. That’s because processor manufacture, for one thing, requires rare minerals that simply do not exist in the US and must forever be imported.
Overall, Wedbush analysts say over the long term, they are bullish on Apple specifically because of its Services business. Services is why it is putting the price target as high as $250.
The company says that if the tariffs are removed, or if Apple is made exempt, its price target will go back to $325. Wedbush makes no specific judgement on the likelihood of this happening, but says it is working with the idea that tariffs will remain as they are “for a few months.”
Repeatedly, though, the investment note cautions that, “the sheer uncertainty of this tariff announcement will cause demand destruction for consumers globally (recession fears, etc) and the price consequences of this tariff action are hard to grasp and model.”
Wedbush last put Apple at $250 in December 2023. That valuation was partly because of Services, but chiefly on the expectation of strong holiday sales of the iPhone 15 range.
