Trump’s fresh threat of a 25 % tariff on every iPhone made outside the United States has knocked almost $70 billion off Apple’s market value in two trading days, and it has added a new headache just when OpenAI’s $6.5 billion purchase of Jony Ive’s hardware startup “io” signals a serious challenge to Apple’s design dominance.
Things have only been looking worse in recent weeks, and the bullish arguments have only been narrowing due to Apple’s growth already slowing down over the past few quarters. Let’s take a look at whether or not it’s worth going for AAPL stock in this environment.
On May 23, President Trump declared that any iPhone “not built in America” will face a 25 % tariff, and he floated a 50% rate if Apple drags its feet. He repeated the message the next day, telling Apple that shifting capacity to India is “fine, but you will pay at the border.” Bloomberg confirmed the White House delivered the threat directly to Tim Cook after a face-to-face meeting.
Apple already plans to shift most U.S.-bound iPhone production to India by 2026. This would still cost the company 5% to 10% more than China, and that’s even though India is a country with a GDP per capita five times less than that of China. Financial analysts say a fully “Made in America” iPhone could retail above $3,500. That’s probably a rosy long-term estimate, since it would cost a lot more to set up everything.
OpenAI is buying Ive’s startup “io” for $6.5 billion in stock and bringing the design legend back into consumer hardware. This time, it will be powered by generative AI. Ive’s team includes veterans who created the original iPhone, and they intend to ship “physical AI embodiments” that could overlap with Apple’s wearables and Vision line.
If OpenAI places ChatGPT in a slick pocket device before Apple retools Siri, the iPhone’s lock-in could erode faster than Wall Street expects. That is not a certainty, but it is a real risk.
Tariff theatrics rarely outlast Apple’s product cycle, and a cash-rich giant can absorb short-term pain, but if you take into account all the other issues here into account, the build-up of everything bad is hard to ignore.
Not only has growth been organically slowing down due to a lack of innovation, but Apple has also lost out on the two major needle-movers that every other Magnificent Seven stock is diving head-first into. Apple does not have a hyperscale cloud business independent of its own ecosystem, and the “AI” progress of Apple is minimal vs. other mega-caps. Tariffs and what OpenAI is doing now are two big headaches on top of that.
Of course, AAPL stock is likely to yield gains in the long run, but I’d consider trimming and shifting some of those gains into hotter stocks in the market.
