Apple (AAPL.O) saw a 5% drop in its stock on Friday, following the announcement that the company would scale back its stock buyback program and absorb a $900 million cost hit related to tariffs. CEO Tim Cook cited the ongoing Sino-U.S. trade conflict, with U.S. President Donald Trump’s fluctuating tariff policies adding pressure on Apple’s operations. The company, which has long been a contender for the title of the world’s most valuable firm alongside Microsoft, is now navigating complex challenges from rising import costs and uncertain trade actions.
Apple’s decision to reduce its stock buyback authorization by $10 billion came as a surprise to analysts, with the company typically maintaining or increasing its repurchase levels. Angelo Zino, equity analyst at CFRA Research, questioned this move, noting the historical trend of Apple either maintaining or increasing buyback levels. The company’s $100 billion buyback this year was a marked decrease from the $110 billion authorization in 2024.
The ongoing tariff uncertainty has led analysts to speculate that iPhone prices could rise if Apple opts to pass on the additional costs to consumers. However, Cook assured that the majority of U.S.-bound iPhones this quarter would be manufactured outside China. He also emphasized that Apple is ramping up efforts to shift its supply chain away from China, with a significant portion of U.S.-bound iPhones now being assembled in India.
Apple reported quarterly sales of $95.36 billion, narrowly beating market expectations, with earnings of $1.65 per share. However, the company forecasted low-to-mid single-digit revenue growth, reflecting a more cautious outlook. In China, Apple posted $16 billion in revenue, slightly above forecasts, but continues to face strong competition from Huawei and challenges in AI development.
Apple’s stock decline could lead to a loss of over $150 billion in market value, while Microsoft’s recent bullish outlook has helped it reclaim the title of the world’s most valuable company. The company’s shifting supply chain strategy, including sourcing more chips from the U.S. and expanding operations in Texas, Arizona, and Oregon, comes at a cost but is seen as a necessary move to mitigate risk and reduce dependence on Chinese manufacturing.
Source: Swifteradio.com
