Apple shares continued their slide on Wednesday after China responded to US tariff hikes by raising its own levy on American goods to 84%, escalating the trade war and compounding investor concerns about the tech giant’s China exposure.
The AAPL stock fell 2.04% in premarket trading, extending its losses to over 23% across the past four sessions.
That steep decline has pushed Apple below Microsoft in market capitalization, ending its reign as the most valuable company in the United States.
The company’s market cap as of Tuesday was around $2.59 trillion. Microsoft is currently valued at around $2.64 trillion.
Why is the AAPL stock falling?
On Wednesday, China formally announced its retaliatory tariff increase following President Trump’s move to hike US duties on Chinese imports to 104%.
In a government statement, Beijing described the US escalation as a “mistake on top of a mistake” and accused Washington of damaging the multilateral trade system.
China’s new tariff rate on US goods will take effect at 12:01 a.m. local time on April 10.
Analysts have warned that Apple, which still relies heavily on Chinese manufacturing, particularly for the iPhone, could face significant earnings pressure under the new trade regime.
Needham recently projected that Apple’s fiscal 2025 earnings could be reduced by at least 28% in a full-blown US-China trade war unless it secures an exemption from the tariffs.
Jefferies cuts price target despite upgrade
Jefferies on Wednesday upgraded Apple from underperform to hold, but lowered the price target from $202.33 to $167.88, reflecting the deteriorating macro environment and Apple’s vulnerability to the tariff standoff.
The stock is now trading near its 52-week low of $164.07.
The firm expects Apple to eventually gain an exemption due to its stated plan to invest $500 billion in the US over the next four years, which may include moving some iPhone production stateside.
Still, Jefferies flagged broader economic risks, including a potential global recession that could weigh on iPhone demand.
Jefferies also cut its iPhone shipment forecasts for fiscal years 2025 through 2027 by between 3.6% and 7.7%, translating to revenue revisions of 2% to 4.1% over the same period.
Apple’s attempt to space tariffs
Apple reportedly shipped five full flights of iPhones and other products from India and China to the US in the last week of March.
The move came ahead of a 10% tariff on electronics imposed by the U.S. administration, which came into effect on April 5.
March is typically a quieter period for product shipments, making the timing notable.
According to the reports, the company aimed to stock up its US warehouses before the tariff deadline to manage near-term pricing and supply.
Products shipped prior to April 5 were not subject to the new duties.
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