Analyst Forecasts Tariffs Impact On Apple's Profit And Highlights 2 Software Stocks That Are Safeguards

Following the Trump Administration announcing wide-ranging tariffs on all imported products, with rates starting at 10% and going higher depending on the country, Needham published last Thursday, Friday, and Monday’s initial reactions to their coverage areas on who has the most exposure.

Apple Inc AAPL stock fell nearly 10% Thursday, losing about $300 billion of market cap, owing to new tariffs. However, unless Apple gets an exemption, analyst Laura Martin calculated that Apple’s adjusted EPS will fall by over $2, down 28% from the analyst’s current fiscal 2025 EPS estimate of $7.32.

Also Read: Microsoft Halts Data Center Expansions Due To Semiconductor Tariff Concerns, AI Overcapacity Fears

By implication, Wall Street is betting there is a 30% chance Apple will get an exemption because Trump gave it an exemption in 2018.

The company committed to spending $500 billion in the U.S. over 4 years, creating 20,000 new jobs, and it is the most iconic U.S. brand in the world.

EPS down 28% is not the worst case. China retaliates against the U.S. by banning all or some Apple product sales in China, which were 17% of Apple’s total sales in fiscal 2024, which can pose a bigger threat.

Martin noted that DoubleVerify Holdings, Inc.’s DV business model is based on a fixed fee, not a revenue share of ad spending. The analyst noted that 100% of DoubleVerify’s revenue is virtual.

As per Martin, 30% of the company revenue is from outside the U.S., which is yet to be impacted. DoubleVerify verifies advertising in both Walled Gardens and the Open Internet, so if advertising happens anywhere, DoubleVerify should earn its fees.

DoubleVerify is well diversified across verticals, without significant exposure to industrials, autos, or durables, which are the most at risk from tariffs and fundamental growth drivers like new customers from moat, more up-sells of additional products to existing customers, incremental traction on DoubleVerify’s Meta pre-bid product, and new business wins could offset tariff-related weakness.

The impact of new tariffs on Viant Technology Inc DSP is 100% advantageous (i.e., virtual), with no hard goods. Viant Technology is missing the three most tariff-exposed ad categories: industrials, durables, and national autos.

Viant Technology’s largest ad categories are U.S. healthcare, U.S. universities, education, and travel/hospitality. Together, local autos plus CPG were less than 20% of total ad revenue in 2024, Martin estimated. So far, prior tariffs have only negatively impacted ad spending on avocados from Mexico.

Price Action: AAPL stock is trading lower by 4.89% to $179.26 at the last check on Monday.

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