As Apple Sheds Over $500 Billion In Market Cap Since Trump's 'Liberation Day,' Top Analysts Weigh In On Its Path Ahead

Amid the ongoing trade war between the U.S. and China, Apple Inc. AAPL is grappling with potential setbacks, according to industry experts.

What Happened: Apple’s significant dependence on Chinese supply chains is becoming a hurdle as trade tensions escalate. Despite a temporary 90-day halt on many of Trump’s “reciprocal tariffs”, the total tariff rate the U.S. has imposed on Chinese goods has now reached a staggering 145%.

Dan Ives, global head of technology research at Wedbush Securities, cautioned, “Apple could be set back many years by these tariffs.” Although Apple has been working to diversify its supply chain away from China, nearly 80% of the 77 million iPhones shipped to the U.S. last year were still made in China, according to data from Omdia, reported CNBC.

Omdia predicts that to maintain its profit margins, Apple may have to hike its prices on phones sold in the U.S. from China by approximately 85%. “It wouldn’t make financial sense for Apple to raise prices based on the current tariffs,” said Le Xuan Chiew, research manager at Omdia.

However, Apple’s woes don’t just stem from tariffs. Even before Trump’s tariffs, internal concerns were growing at the company about whether the iPhone maker was losing its innovative edge due to struggles in developing new products.

Benedict Evans, an independent analyst told New York Times, "It's clearly a breakdown of leadership and communication and internal processes.”

Why It Matters: The tariffs, implemented on April 2, led to more than a $500 billion drop in Apple's market capitalization until April 10, temporarily costing the company its title as the world's most valuable publicly traded firm to Microsoft MSFT

Before the implementation of Trump’s new tariffs, Apple reportedly shipped 600 tons of iPhones, equivalent to 1.5 million units, from India to the U.S. However, it remains uncertain how long these reserves will last, especially with the anticipation of higher prices driving up iPhone purchases.

Experts recommend that Apple's most strategic move might be to request a tariff exemption from the Trump administration for its Chinese imports, even as it works to diversify its supply chain. “I still see some potential relief that can come in the form of concessions for Apple based upon its $500 billion U.S. commitment,” said Daniel Newman, CEO of The Futurum Group.

On the flip side, Craig Moffett, co-founder and senior analyst at MoffettNathanson feels, "Even a 10% baseline tariff poses an enormous challenge for Apple." Meanwhile, Dan Ives predicted that a U.S.-manufactured iPhone would cost $3,500 instead of the usual $1,000.

On Wednesday, Jefferies analyst Edison Lee slashed his price target on Apple stock from $202.33 to $167.88. Over the past month, the stock lost nearly 14%.