Apple has tariff problems its Big Tech peers do not

Apple (AAPL) reported better-than-anticipated earnings after the bell on Thursday on stronger-than-expected iPhone sales. But a murky outlook sent shares of the tech giant down 4% on Friday as the company continues to grapple with the impact of President Trump’s tariffs.

Trump’s 145% duties on Chinese imports forced Apple to transition manufacturing of iPhones destined for the US to India, despite the fact that the president instituted exemptions on smartphones and computers.

During Apple’s earnings call, CEO Tim Cook warned that the company would take a $900 million hit from tariffs in the third quarter. But when pressed by analysts about guidance beyond that, he declined to offer additional insights, saying he didn’t want to try to “predict the future.”

It’s not as though Apple’s Silicon Valley peers are entirely unfazed by tariffs.

Google (GOOG, GOOGL) said it was too early to tell if tariffs are impacting its business in the current quarter, and Amazon (AMZN) projected lower-than-anticipated operating income for its second quarter.

But Apple is uniquely vulnerable to tariffs among its contemporaries. This is because, unlike Meta (META), Microsoft (MSFT), or any other tech giant, it generates the overwhelming majority of its revenue from products built overseas.

And while the company’s products are largely exempt from tariffs for now, the Trump administration has hinted that it could reinstate duties on computers and other devices when it makes its decision on semiconductor tariffs in the coming weeks.

Apple’s tariff troubles

Apple generated $95.4 billion in sales in its latest quarter, and all of it, besides the $26.6 billion the company made in Services revenue, is attributable to devices ranging from iPhones and iPads to Macs and Apple Watches. That’s all well and good when tariffs aren’t roiling markets, but it’s a major problem when they are.

Apple is working to diversify its supply chain, saying it will build the bulk of iPhones headed to the US in India and the majority of other products intended for the US market in areas including Vietnam.

But the US has placed tariffs on those countries, as well, though they’re temporarily on hold as the Trump administration negotiates potential trade deals.

Read more: The latest news and updates on Trump’s tariffs

And while the company’s $900 million hit from tariffs in Q3 isn’t an enormous blow to the company’s finances, some analysts say it’s likely to get worse.

“We believe the Jun Q guide is the best-case scenario, assuming 1) China tariff stays at 20% (likely no need to ship more anyway for this Q), and 2) no tariffs on imports from India and Vietnam,” Jefferies analyst Edison Lee wrote in a note to investors. “These assumptions are unlikely to hold longer term.”

UBS analyst David Vogt similarly raised concerns about a potential drop in iPhone sales in the June quarter.

“The company guided June [revenue] growth of ‘low single to mid-single digits,’ roughly 100bps below our expectations,” Vogt wrote in an investor note following Apple’s earnings. “Additionally, segment color was not provided, raising some concern that iPhone revenue could decline [year over year] in June.”

Even if Washington gets trade deals done with India and Vietnam and Apple doesn’t have to worry about country-specific tariffs, it still has to contend with the Trump administration’s Section 232 investigation into whether it should place duties on semiconductors. And that could be a major pain for the company.

“Our analysis indicates for every 1ppt increase in tariff above the current assumptions (across all countries) translates into [a] 1.5ppt impact on AAPL’s FY25 pre-tax profits (assuming no [average selling price] hikes),” Jefferies’ Lee wrote.

For now, Apple’s outlook is as cloudy as it gets. And things won’t clear up until the Trump administration provides information on trade deals or its Section 232 investigation. Until then all Apple can do is wait.