What's Going On With Apple Shares

Apple Inc AAPL shares are trading lower by 2.8% to $228.34 Wednesday afternoon. The stock is falling potentially amid concerns over geopolitical tensions and potential supply chain disruptions following Trump's comments on the China-Taiwan standoff and outsourcing, coupled with a lukewarm forecast from chip equipment maker ASML. These factors are raising investor fears about increased costs and production challenges.

Why This Matters To Apple Investors

Apple relies heavily on TSMC for its chips. Any indication of political instability between China and Taiwan could threaten the stability of this supply chain, leading to potential disruptions in production and increased costs for Apple.

Trump's comments about the China-Taiwan standoff raise concerns about increased geopolitical tensions. This adds a layer of uncertainty that can affect the operations and profitability of companies relying on Taiwan-based manufacturers.

If the U.S. were to impose new tariffs or trade restrictions on Taiwan or China, this could lead to increased costs for Apple's components, affecting profit margins.

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Additionally, Trump's criticism of U.S. companies outsourcing chip manufacturing to Taiwan suggests a possible push for bringing manufacturing back to the U.S. This transition would require significant investment and time, during which Apple's production capabilities and efficiency might be adversely impacted.

Manufacturing chips in the U.S. could be more expensive due to higher labor and operational costs compared to Taiwan. This could lead to higher production costs for Apple, potentially affecting its pricing strategies and profitability.

Should I Sell My AAPL Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Apple have gained 17.15% year to date. This compares to the average annual return of 18.85%, meaning the stock has underperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Apple stock currently has an RSI of 76.11, indicating overbought conditions.

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AAPL has a 52-week high of $237.23 and a 52-week low of $164.08.