Apple Analyst Holds The Line After $300 Billion Rout: What Could Turn Things Around

Needham analyst Laura Martin reiterated Apple Inc (NASDAQ:AAPL) with a Buy rating and a $260 price target Friday.

Apple stock tanked nearly 10% Thursday, losing about $300 billion of market cap, owing to new tariffs.

Apple stock lost 13.7% in market value over two days, marking its worst drop since January 2013.

Also Read: Apple Set For Strong iPhone Upgrade Cycle Driven By AI, Analyst Says

SPDR S&P 500 (NYSE:SPY) lost 7.6% in value for the week, marking its most significant weekly loss since March 2020. The iShares Semiconductor ETF (NASDAQ:SOXX) is down 16% this week, marking its worst performance since the dot-com bust in September 2001.

However, unless Apple gets an exemption, Martin calculated that the iPhone maker’s EPS would fall by >$2 on an adjusted basis, down 28% from her current fiscal 2025 EPS estimate of $7.32.

By implication, Wall Street is betting there is a 30% chance Apple will get an exemption because President Donald Trump gave the company an exemption in 2018. Also, on Feb. 5, Apple committed to spending $500 billion in the U.S. over 4 years, creating 20,000 new jobs in engineering, R&D, manufacturing, and AI. According to Martin, Apple is the most iconic US brand in the world.

Apple’s EPS decline of 28% is not the worst case, which would include China retaliating against the U.S. by banning all or some of the company product sales in China, which were 17% of Apple’s total sales in fiscal 2024.

On Friday, Rosenblatt analyst Barton Crockett estimated that Apple could be hit with $39.5 billion in tariff costs. He noted that nearly 100% of iPhones sold in the U.S. are manufactured in China, along with 90% of Macs, 80% of iPads, 90% of Apple Watches, and 35% of AirPods.

Price Action: AAPL stock is down 6.8% at $189.34 at last check Friday.

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