Apple's stock price has rebounded consecutively. Is the market betting on iPhone getting a tariff exemption?

Expectations for tariff exemptions rise, and Apple's stock price rebounds.

After the implementation of Trump's tariffs, Apple's stock price experienced a sharp decline, but over the past two days, it unexpectedly rebounded significantly. Apple's stock price has soared 15% since April 9, adding more than $400 billion to its market value, with a single-day increase of 4.1% on Friday, closing at $198.15.

This rebound stems from Wall Street analysts and investors increasingly believing that Apple will receive tariff exemptions, which has become a key factor supporting the stock price.

CFRA Research analyst Angelo Zino stated that the likelihood of Apple obtaining exemptions has significantly increased:

“Under the current circumstances, the impact of tariffs is particularly severe for Apple, potentially increasing its sales costs by about $50 billion.”

“We expect Apple to delay passing any tariff costs onto consumers until the fall product cycle, and if a trade agreement cannot be reached in the short term, we have raised the probability of Apple obtaining special exemptions from 20% to 50%.”

Mizuho Securities trading desk analyst Jordan Klein is more optimistic, stating that investors he spoke with are convinced that Trump will grant Apple exemptions:

“90% of investors seem to believe that Apple will receive tariff exemptions, after all, the company received an exemption during Trump's administration in 2018.”

U.S. employment and political considerations support the possibility of exemptions

In the current geopolitical tensions, Apple's unique position may be key to its receiving special treatment.

Analysts point out that Trump would not want to harm iconic American companies like Apple, especially after the company committed to spending over $500 billion on U.S. manufacturing and other domestic investments over the next four years.

Jordan Klein emphasized:

“The company employs too many people, and American voters are overly reliant on the iPhone; they will not accept a situation where the iPhone costs $2,000.”

Another argument supporting Apple's exemption is that Trump's tariff policy may inadvertently benefit Apple's main competitor—South Korea's Samsung Electronics. From a political perspective, this outcome clearly contradicts Trump's "America First" policy.

Apple is not solely relying on exemptions and has begun a multi-faceted approach

Although the market generally views the prospects of Apple obtaining exemptions positively, the company has not pinned all its hopes on this.

Morgan Stanley analyst Erik Woodring stated:

“We do not believe Apple will solely bet on presidential exemptions, and as we have learned while tracking the company, Apple always maintains a long-term perspective.”

In recent years, Apple has been working to diversify its supply chain, including shifting some iPhone production to India. During the 90-day tariff grace period, Apple may seek its Indian partners to meet U.S. iPhone demand Woodring estimates that to meet the demand for iPhones in the United States, Apple needs to double its production capacity in India, although this may take longer to achieve.

There are also views that another strategy is to alleviate artificially inflated iPhone prices by offering financing plans, increasing carrier subsidies, and raising the trade-in value.

If exemptions cannot be obtained, Apple may adopt other strategies to mitigate tariff pressure. Morgan Stanley analysis states that Apple may eliminate low-end iPhone storage models and shift demand towards higher-margin iPhone models