Apple Sinks After New 25% Tariff Announcement—What's The Bottom?

Key Points

• Apple is now the subject of a new 25% tariff on all products not made in the United States, which could have a major impact on the stock moving forward.
• Even with the current landscape being more uncertain, investors can see this major technical level as a potential support area.
• Markets are backing the company's power to adjust in the right direction through valuation multiples quickly.

There seems to be a very small list of stocks that are now immune to President Trump's recent trade tariff announcements. The implementations are starting to hit more industries and companies as a whole, with no certainty or clear expectations. The latest round seems to be focused on the technology sector, with a new announcement that wasn’t directed toward the peer group as a whole, but toward a specific company.

In an unexpected move, President Trump imposed a 25% tariff on Apple Inc. NASDAQ: AAPL, telling Tim Cook, the company’s CEO, that a new tariff would now be applied to all iPhones and potentially other Apple products manufactured in India and not the United States. Of course, this severely changes the future path of Apple’s business and the way investors know it today, since there are several implications.

Moving its supply chain and logistics network from India to the United States might take longer than the company (or customers) would like. Still, the cost of keeping the bulk of production in India could be just as bad in the future. Whether Apple decides to move or stay, raise prices or seek alternative measures—well, that’s what the bulls are trying to figure out today. Until the answer comes from the company itself, finding a potential bottom seems to be the most important thing.

A Technical Lesson for Apple

Like every major stock in a market or even an index like the S&P 500, there is one key technical level that all investors need to be aware of (especially what happens behind these levels). In every cycle, an index will tend to pull back by as much as 20% from its all-time highs, signaling a potential decline in economic outlooks or forecasts in the future.

That being said, two things will typically happen whenever these bearish expectations get priced into an index (or major stock like Apple). Margin requirements from brokers and other financial institutions will increase during the volatility, forcing participants to inject more cash into the system to keep their positions or close out and dump their assets by default.

Now, both Apple and the S&P 500 tested this key level during the so-called “Liberation Day” of April 2025, and it seems that market participants made the former choice of injecting cash into the system, giving everyone a new sense of hope that the economy might have another set of lungs to keep running upward.

Knowing that most of the new money was recently injected at this level, investors can see it as a potential support level to be tested and respected. If that is not the case, then a bigger decline might be in the works for the company moving forward.

Considering Apple stock’s 52-week high of $260.1 per share, this 20% decline support area can be set to roughly $208 per share, slightly above where the stock fell after this new 25% tariff announcement was made. Now, this is where timing comes into play for Apple investors.

The Clock Is Ticking: Will Apple Recover?

It’s been less than a week since Apple breached this key level, so it might be too early for everyone to tell whether their stock will keep making lower lows or whether new participants will find it compelling enough to keep injecting more cash into the system.

That being said, investors can game this situation out for the future. What are the chances that Apple will return its production to the United States? Well, then, how much will labor costs increase the price tags on iPhones and MacBooks? Consumers are likely to see a significant increase from the prices they know today.

On the other hand, Apple could choose to follow what other competitors are doing (or at least are probably thinking of doing): bringing technology into the assembly and manufacturing process, bypassing the inherently more expensive labor that would result from producing Apple products in the United States.

Another potential scenario could be that Tim Cook yields to President Trump’s wishes for onshore manufacturing and grants a phase-out of these tariffs to give Apple enough time to make the necessary adjustments. Whichever the case may be, investors will likely know ahead of time by seeing how the stock reacts to this key technical level.

In any of these cases, there must be a reason for the market to pay up to 51.8x for the stock on a price-to-book (P/B) basis, which is a steep premium to the rest of the computer sector’s average of 6.7x. If the market is now willing to still pay up for Apple’s balance sheet, it must mean they trust it will handle this situation to seek the best outcome for shareholders.