Apple (AAPL) fell more than 9% on Thursday, April 2, after President Donald Trump unveiled sweeping reciprocal tariffs after Wednesday's close. Shares dropped another 7% on Friday as the sell-off continued to a second day.
This is the latest bout of technical troubles the once-high-flier has faced recently, with shares of AAPL down nearly 25% for the year to date.
Why is Wall Street so worried about Apple stock – and should you be too?
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Trump tariffs create a major headwind for Apple stock
Apple's price struggles this year have come amid broader risk-off sentiment from investors. Concerns about slowing iPhone sales and consumer demand didn't help matters.
These worries are being compounded following the latest Trump tariff news.
"Both the magnitude of 'reciprocal' tariffs imposed per country and the set of countries they were imposed on were larger than many had reasonably anticipated," notes UBS Global Research strategist Bhanu Baweja.
The 10% universal tariffs "is an added shock," Baweja says. This, he believes, has the potential to "considerably worsen" both domestic and global economic growth in the year ahead.
Additionally, Apple relies "on extensive international manufacturing, with the large majority of finished goods sold into the U.S. assembled in (Southeast) Asian nations," which leaves it one of the worst-positioned to absorb the tariffs, notes Morgan Stanley analyst Erik Woodring.
Woodring believes that Apple could incur an added tariff cost of more than $38 billion annualized, which works out to roughly 26% of EBIT (earnings before interest and taxes) for fiscal 2026.
He adds that the "heightened uncertainty" will also likely elongate sales cycles.
CFRA Research analyst Angelo Zino says he is waiting for more clarity from both Apple's management and the Trump administration on potential next steps.
Still, Zino lowered his price target on AAPL stock to $235 from $270, explaining that he sees "downside to both margins and earnings if the reciprocal tariffs hold. We also see risk that China and others could retaliate, targeting technology companies like AAPL."
Despite Wall Street's worries, most analysts remain in Apple's corner. Of the 45 analysts who cover AAPL stock tracked by S&P Global Market Intelligence, 21 say it's a Strong Buy, seven call it a Buy, 13 have it at Hold, and four say it's a Sell or Strong Sell.
This works out to a consensus Buy recommendation, though with slightly less conviction than at the start of the year.
What should investors do about Apple stock?
Ups and downs are part of being invested in the stock market, and investors who have held on to their Apple shares over the long term have come out on top.
Even though Apple is one of the worst Dow Jones stocks so far this year, shares have averaged an annual total return (price change plus dividends) of 28.2% in the past five years. The S&P 500, meanwhile, has generated an average annual total return of 19.4% in that same time frame.
Remember that the idea is to buy low. Stocks are cheaper today than they were yesterday. They might get cheaper tomorrow, but the long-term trend has always been up and to the right. That's why dollar-cost averaging works for investors.
As CFRA's Zino reminds us, Apple is better positioned than most hardware vendors in terms of free cash flow and balance sheet strength, and its growing Services business should help buffer downside for now.
In Apple's most recently reported quarter, its Services division accounted for 21% of total revenue.
Related content
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case StudySusan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every AgeFrom toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case Study
Susan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every Age
From toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
I'm an Investment Pro: Here's How Alternatives Could Inject Stability and Growth Into Your PortfolioAlternative investments can often avoid the impact of volatility, counterbalancing the ups and downs of stocks and bonds during times of market stress.
-
Dow Bleeds Red Due to Big Blue: Stock Market TodaySix of the official GICS sectors were in the green, led by communications services, technology and energy stocks.
-
July Fed Meeting: Live Updates and CommentaryThe July Fed meeting could be a lively economic event, with Wall Street keyed into what Fed Chair Powell has to say about interest rates and President Trump.
-
A Contrarian Approach Pays Off for This Small-Cap FundSmall-cap stocks have been hit hard by tariff worries, but this T. Rowe Price fund has outperformed thanks to its manager's against-the-tide approach.
-
A Financial Planner's Guide to Unlocking the Power of a 529 Plan529 plans are still the gold standard for saving for college, especially for affluent families, though they are most effective when combined with other financial tools for a comprehensive strategy.
-
An Investment Strategist Takes a Practical Look at Alternative InvestmentsAlternatives can play an important role in a portfolio by offering different exposures and goals, but investors should carefully consider their complexity, costs, taxes and liquidity. Here's an alts primer.
