Apple May Face Limited Tariff Impact, Trump Administration Could Ease DOJ Pressure: BofA

BofA Securities analyst Wamsi Mohan maintained a Buy rating on Apple Inc AAPL with a price target of $265.

The rerating reflects a strong iPhone upgrade cycle in fiscals 2025, 2026 driven by the need for the latest hardware to enable Gen AI features, higher growth in Services revenue, and higher margins from more internally developed silicon.

Over the weekend, the U.S. imposed a 10% tariff on China imports.

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In the last tariff cycle, Apple got an exception for the iPhone. It remains unclear if it can this time around.

Mohan analyzed the earnings impact if tariffs do impact Apple and Apple maintains existing pricing in the U.S. rather than raises prices. Either way, Mohan noted a limited impact on earnings. President Trump and the Republican administration may be more inclined to resolve Google and Apple’s cases against the DOJ favorably and push European counterparts for less regulation related to DMA.

Apple can manufacture most iPhone models in India. As the new tariff kicks on imports from China, Apple could have its manufacturing partners ramp up production in India and ship to the U.S. Apple could do it for its other products manufactured in countries including Vietnam, Malaysia, etc.

Mohan assumed that Apple could source 80% of its products sold in the U.S. from different countries besides China. If he thought 50% of devices still get sourced from China, the EPS impact would be ($0.12) if Apple does not raise prices and ($0.07) if Apple chooses to raise prices.

Mohan’s fiscal 2025 revenue and EPS are $411 billion and $7.30.

Price Action: AAPL stock is down 3.97% at $226.62 at last check Monday.

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