How Trump's Immigration Policies Could Impact The Future Of Apple

Apple Inc.'s AAPL Q1 earnings report has the stock near all-time highs. Despite the rally, many questions linger about the future of the tech giant.

Benzinga spoke with Loup Ventures' Gene Munster and Piper Jaffray's Michael Olson on Wednesday morning's PreMarket Prep, and asked about the effect President Donald Trump's policies could have, expansion into international markets, and if they'll ever make an acquisition.

The Trump Effect And International Markets

Outside of typical consumer trends and market pressures this year, Munster said Apple is likely to be affected by President Trump’s immigration policy.

“About 10 percent of Apple’s R&D [research and development] comes from people who are on work visas, so that’s something that could have an impact down the road,” Munster said. “I think that Apple’s response to that is going to be similar to other tech giants, so they’ll just have more offices for R&D outside the U.S. or expand those offices, but that’s another very clear concern that should be around the longer term health of all these companies.”

As far as expansion into China and India—something CEO Tim Cook referred to as challenging on Tuesday’s conference call—Munster ranked Apple’s international market as a six out of 10. He noted the iPhone 6's positive run in China, and Olson added he expects Apple to shift its foreign focus from China to India in the coming years.

What About All That Cash?

Apple reported more than $200 billion in cash. As usual, the question remains what they’ll do with all that money. Munster said he doesn’t expect a big acquisition, but a buyback is in the realm of possibility.

“We think that they can, essentially, if there’s a good tax holiday, that they could buy back an additional $20 billion which would add up to 3 percent to the stock,” he said.

Olson anticipated possible expansion of Apple’s content offerings.

“There’s been constantly a question of what Apple’s going to do in content going forward, and we heard rumblings of an Apple television service in the past, and it really never came to fruition,” Olson said. “So original content might be one avenue to go. Other content that’s exclusive can be expensive, and this could be a way to invest in that area, as well.”

Advice To Investors

Munster predicted the next six months, as hype builds around the iPhone 10, should be “a great time to own Apple.”

Olson agreed, adding that investors want to own Apple through the November product launch and then, based on the company's capacity for continued innovations, decide whether to sell shares.

Piper Jaffray maintains a price target of $155 for the stock, which was trading at $128 at time of writing, up 6 percent on the day.

To hear the entire conversation with Munster and Olson, go to 31:18 in the clip below.

PreMarket Prep is a daily trading ideas show focused on technical analysis and early morning movers Listen to PreMarket Prep and chat LIVE with our hosts, guests, and other listeners every weekday morning from 8-9 ET! On Thursday we're chatting with Prattle Analytics CEO Evan Schnidman, Piper Jaffray Technical Market Strategist Craig Johnson, and Chaikin Analytics' Sandy Chaikin.

Image credit: IPhoneDigital, Flickr