Apple shares slid sharply following the company’s warning that it expects to face a $900 million headwind from tariffs in the current quarter, underscoring the mounting cost pressures from escalating trade tensions.
The tech giant’s stock fell nearly 4% after CEO Tim Cook disclosed during the fiscal second-quarter earnings call that tariffs would significantly impact Apple’s bottom line for the quarter ending in June.
Despite delivering better-than-expected results-reporting $95.4 billion in quarterly revenue and $1.65 per share in earnings, both above Wall Street estimates-investors focused on Apple’s cautious outlook regarding tariffs.
The $900 million tariff estimate is based on current global rates and assumes no further changes to trade policy through the end of the quarter. Cook declined to provide guidance beyond the June quarter, highlighting the uncertainty that tariffs introduce to Apple’s financial forecasting.
The immediate pressure stems from the Trump administration’s 145% tariff on imports from China, a move designed to address trade imbalances and protect domestic manufacturing. While Apple’s iPhones and other core devices have so far been largely exempt from the harshest tariffs, the company is still exposed to a 20% import tax on some products, and the risk of further levies looms.
To mitigate these risks, Apple has accelerated its supply chain diversification, shifting the majority of U.S.-bound iPhone production to India and moving production of iPads, Watches, and AirPods for the U.S. market to Vietnam.
Analysts note that Apple’s hardware-heavy business model leaves it more vulnerable to tariffs than its Big Tech peers, which rely more on software and services. The company’s rapid supply chain adjustments have helped limit the immediate impact, but sustained tariffs could erode those benefits over time.
JPMorgan and Bank of America both trimmed their price targets for Apple following the announcement, citing the risk that prolonged tariffs could weigh on margins and profitability.
Looking ahead, investors will be closely watching Apple’s ability to execute its production shift and manage inventory, as well as any developments in U.S.-China trade negotiations.
While Apple’s strong brand and global reach provide resilience, the $900 million tariff headwind highlights the ongoing challenges facing multinational manufacturers in an increasingly protectionist trade environment.