Wedbush: Apple's additional $100 billion investment in the U.S. is a "strategic good move" and maintains an "outperform" rating
Wedbush maintains an "Outperform" rating on Apple, with a target price of $270. Apple announced an additional $100 billion investment in the United States, bringing the total investment over the next four years to $600 billion, involving the construction of new server manufacturing plants and the "Made in America" initiative. Wedbush analysts described this move as "a strategic masterstroke by Cook" and noted that it will promote long-term cooperation with companies like Corning
According to the Zhitong Finance APP, on August 6 local time, Apple (AAPL.US) announced an additional investment of $100 billion in the United States. Earlier this year in February, Apple had already announced plans to invest $500 billion in the U.S. over the next four years, including the construction of new server manufacturing plants. This means that Apple's total investment in the U.S. over the next four years will reach $600 billion.
Apple also launched a "Made in America Program" (AMP), which includes new and broader collaborations with 10 companies across the country. Apple stated that the "Made in America Program" aims to bring more of Apple's supply chain and advanced manufacturing processes to the U.S. The first batch of partners includes Corning (GLW.US), Coherent (COHR.US), GlobalWafers, Applied Materials (AMAT.US), Texas Instruments (TXN.US), Samsung, GlobalFoundries (GFS.US), Amkor (AMKR.US), Broadcom (AVGO.US), and MP Materials (MP.US).
In response, investment bank Wedbush commented that Apple's additional $100 billion investment in the U.S. is "a strategic masterstroke by Cook." The firm maintains an "outperform" rating on Apple, with a target price of $270.
The Wedbush analyst team, led by Daniel Ives, stated that the AMP will provide funding for a significant expansion of Apple's long-term partnership with Corning, bringing the company's smartphone glass production line to Corning's factory in Kentucky. Corning's stock rose over 4% in pre-market trading on Thursday.
Analysts added that Apple also announced a new multi-year agreement with Coherent, which produces VCSEL lasers for features like Face ID, and will manufacture them at Coherent's factory in Texas. Additionally, Apple reiterated its procurement agreement with MP Materials announced in July, which involves purchasing rare earth magnets and investing in related projects at MP's Mountain Pass mine in California. Coherent and MP Materials saw their stocks rise approximately 5% and 7%, respectively, in pre-market trading on Thursday.
Analysts stated, "Cook has successfully navigated this unprecedented tariff situation, proving he is '10% politician + 90% CEO.' In this context, he will leverage his strong global relationships to ensure a smoother future for Apple. Despite market concerns that Apple's growth plans may be affected under Trump's 'America First' and tariff policies."
Analysts pointed out that this is a step in the right direction for Apple, helping to ease tensions with Trump. However, Wall Street views the relationship between the White House and Apple over the past few months as filled with "friction."
However, analysts also candidly stated, "The reality remains that producing iPhones in the U.S. is unrealistic; from a cost structure perspective, it is far less favorable than Asia/India. The so-called 'iPhone made in America' still seems like a fairy tale to us. Apple will continue to invest in Macs, artificial intelligence (AI), and other related projects, but will not manufacture its core flagship product, the iPhone, domestically in the U.S."
