What Happened?

Shares of iPhone and iPad maker Apple (NASDAQ: AAPL) fell 4.1% in the morning session after the company reported mixed first-quarter 2025 (fiscal Q2) results, which narrowly topped analysts' revenue expectations, amid tariff concerns. CEO Tim Cook stated during the earnings call that anticipated tariffs could cost the company around $900 million in the current quarter (about 1% of total revenue). Also, sales in China saw a decline of 2%. This is a crucial market for Apple, and any signs of weakness there are usually viewed negatively. Overall, this print was decent, but the areas below expectations seem to be driving the move.

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What The Market Is Telling Us

Apple’s shares are extremely volatile and have had 31 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 23 days ago when the stock gained 4.8% as markets rallied sharply on news that President Trump announced a 90-day tariff pause. Reciprocal tariffs were also dropped to 10% for most countries, sparking renewed optimism amid ongoing trade talks. 

The major stock indices rose as investors, growing impatient of seemingly irrational tariff actions, welcomed the pause as a sign of a more measured path forward. However, Trump was quick to note that China was not part of the pause. Instead, he prepared to raise tariffs on Chinese goods to 125% after China announced retaliatory tariffs on US imports. This tough stance on China stood in sharp contrast to the softer tone toward others. In a week marked by growing uncertainty, this news eased some of the pressure. The questions remain whether we are out of the woods and can sustain the rally or not.

Apple is down 16% since the beginning of the year, and at $204.83 per share, it is trading 20.9% below its 52-week high of $259.02 from December 2024. Investors who bought $1,000 worth of Apple’s shares 5 years ago would now be looking at an investment worth $2,795.

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