Apple Inc
But according to JPMorgan analyst Samik Chatterjee, don't mistake this breather for a green light to go full bull - at least not yet.
Exemptions Offer Margin Relief, But It's Not All Clear
While the hardware tariff exemptions will help reduce immediate margin pressure, Chatterjee warns that the party could be short-lived. The exemptions look more like a patch than a permanent fix, especially with political winds swirling and the administration's long-standing push to bring manufacturing stateside.
AirPods and Apple Watch? Still on the tariff hook. And semiconductors? A wildcard, as Washington eyes potential new levies.
That's a problem for Apple, which still leans heavily on Taiwanese fabs.
Diversification Accelerates Along With Cost Pressures
Supply chain reshuffling is already underway, with India stepping up iPhone assembly and Vietnam handling more accessories.
But Chatterjee says diversification isn't cheap - and neither is ramping up U.S. manufacturing. Between pricier labor and higher fab costs, Apple's cost base could creep up even without new tariffs.
iPhone 16E, FX Tailwinds Keep Near-Term Picture Intact
Still, it's not all gloom. The analyst sees a few tailwinds: Consumers might rush to buy iPhones ahead of any price hikes, FX is finally playing nice and the iPhone 16E could surprise on the upside with strong volume, especially in China.
Bottom line?
The hardware tariff reprieve gives Apple a moment to breathe, but not enough to sprint. For now, Chatterjee is sticking with his Overweight rating - but he's trimmed his price target from $270 to $245, citing macro pressures and long-term cost risks.
So yes, Apple dodged a punch. But in this geopolitical dance, it's still light on its feet - because the next swing might be right around the corner.
