Apple Inc. is under pressure once again, with its shares tumbling over 3% in premarket trading this Friday. The tech giant, known for its resilience, sent shockwaves through Wall Street after revealing it was cutting back on its stock buyback program by $10 billion and bracing for a staggering $900 million hit due to escalating U.S.-China tariff tensions.
In a surprise move, Apple reduced its buyback authorization from $110 billion last year to $100 billion, a rare change in strategy that has investors questioning the company’s confidence in the short term. Historically, Apple has either maintained or increased its share repurchase plans, making this rollback a red flag for many market watchers.
CFRA Research analyst Angelo Zino called the move “a head-scratcher,” especially since Apple is typically consistent with its buyback strategies. The unexpected drop signals a more cautious approach from Apple, likely aimed at preserving cash amid growing global uncertainties.
CEO Tim Cook addressed the elephant in the room during the earnings call, highlighting that Apple is actively shifting its manufacturing operations away from China and ramping up production in India. The company plans to source more chips from the U.S. and expand its presence in states like Texas, Arizona, and Oregon. “Having everything in one location had too much risk,” Cook admitted.
While the company did manage to slightly beat analyst expectations — reporting quarterly revenue of $95.36 billion and earnings of $1.65 per share — it wasn’t enough to quell investor worries. Apple’s forecast for low-to-mid single-digit revenue growth offered little in terms of optimism.
In China, Apple reported $16 billion in revenue — a number slightly above estimates — but the company continues to face growing competition from local brands like Huawei and slower-than-expected adoption of artificial intelligence technologies.
One temporary lifeline for Apple came in the form of a last-minute U.S. exemption on tariffs for consumer electronics, easing immediate concerns about potential iPhone price hikes. However, as trade tensions linger and further action from the White House looms, the reprieve may be short-lived.
Analysts warn that if current losses hold, Apple could shed over $100 billion in market value. Meanwhile, Microsoft’s strong performance this week has helped it surpass Apple as the world’s most valuable company.
Apple’s transition to India could serve multiple purposes — reducing tariff exposure, ensuring supply chain flexibility, and tapping into a fast-growing consumer market. According to Joe Tigay of Catalyst Funds, having a major production base in India could also boost Apple’s standing in the region.
As the tech industry navigates a volatile geopolitical climate, Apple’s next steps will be closely watched — both for what they signal about the future of global tech manufacturing and for their impact on shareholders.
