Apple, Tesla face uncertainty as analyst cuts price targets over Trump's tariffs

Wedbush Securities analyst Dan Ives has sharply revised his outlook on tech giants Apple and Tesla, citing the escalating impact of US tariffs and other market headwinds. In a series of high-profile comments, Ives underscored the vulnerabilities of both companies, citing significant risk factors from trade policies to brand and delivery challenges.

Apple Faces Mounting Tariff Risks

Ives focused particular attention on Apple’s heavy reliance on Chinese manufacturing. With over 90% of its iPhones produced in China, the technology giant is exposed to the adverse effects of the US administration’s imposition of a 54% tariff on Chinese imports. According to Ives, these tariffs could sharply increase production costs—potentially inflating the manufacturing price of an iPhone by more than 45%—and could ultimately force Apple to raise its product prices. Reflecting these risks, Ives has cut his price target for Apple shares by 20%, lowering it from $325 to $250. The analyst warned that such adjustments would likely affect consumer demand and challenge Apple's robust supply chain, adding pressure on the stock amid an already volatile market environment.

Tesla’s Prospects Clouded by Delivery Concerns and Political Backlash

On the electric vehicle front, Ives also downgraded his outlook for Tesla. Citing a confluence of factors—including declining Q1 deliveries, a negative impact from new tariffs on Tesla’s China sales, and CEO Elon Musk’s recent controversial political engagements—Ives dramatically reduced his price target for Tesla shares by 43%, from $550 down to $315. He described Tesla as suffering from a "brand tornado crisis," a scenario that could potentially culminate in what he referred to as a "black swan event" if swift corrective measures are not implemented. Despite these concerns, Ives maintained a cautiously optimistic view regarding Tesla’s technological advancements, highlighting the company's developments in artificial intelligence and autonomous driving. He reiterated that Tesla remains one of the most undervalued AI plays in the market, suggesting that these innovations could eventually drive its valuation toward the $1 trillion mark.

Navigating an Uncertain Market

Ives’ recent comments come at a time when the tech industry is grappling with a multitude of challenges. For Apple, the severe tariff measures threaten to disrupt the established supply chain and elevate production costs, potentially leading to higher consumer prices and dampening market sentiment. For Tesla, the combination of logistical headwinds and reputational risks linked to high-profile political controversies is causing alarm among investors. Both cases highlight the broader impacts of international trade tensions and domestic policy shifts on some of the world’s leading technology companies.