On Monday, Apple (AAPL, Financial) stock reiterated "Buy" at BofA Securities, raising a price target to $265 from $253. This update is in sync with the positive outlook on the tech giant, despite fears about iPhone demand.
The U.S. government has slapped Apple's suppliers with a potential supply chain impact by taxing Chinese imports over the weekend with a 10% tariff. Apple, as in previous tariff cycles, sought and received carve-outs for phone products, but it is unclear if that will be the case for this run.
For example, analysts have assessed how differing U.S. price levels could affect Apple's earnings under two scenarios, with existing U.S. pricing versus this pricing increasing. In either case, the effect on earnings is expected to be limited. Moreover, the current administration may also be preferentially disposed to negotiated resolution of ongoing Department of Justice cases involving heavyweights in the tech sector and supportive of a reduced sensitivity toward the Digital Markets Act.
New tariffs could be the clog in the wheels for Apple, says BofA Securities, but its stable cash flows, resulting in earnings and the ability to benefit from artificial intelligence applications on edge devices, continue to maintain a positive stance on the company.
