“The last thing Apple needs right now is a gut punch on the US/China front.” — Analyst Daniel Ives
From a note to clients that landed on my desktop Monday:
With news last night that Trump plans to enact the additional tariffs on Chinese goods this Friday, tech stocks are ultimately caught in the cross fire with Apple and the semiconductor space remaining front and center and thus weighing on stocks accordingly this morning…
Ever since the “Fort Sumter” moment when President Trump blocked Broadcom’s $117 billion bid for Qualcomm last year citing national security concerns around 5G, the technology sector and investors have been wondering what would be the next poker move between the two countries this week regarding national security, 5G competition, IP theft, and broader cyber risks that have been heightened on worries/media reports around stepped up hacking from China and related hacking groups on US technology companies…
Importantly, as it relates to Apple, given the company’s high exposure to China from both a demand and supply chain perspective with its flagship Foxconn factory front and center and the iPhone demand doldrums seen in the March quarter all eyes will be on China as Cook & Co. are finally starting to see this linchpin region rebound over the last month.
The last thing Apple and the semi space needs right now is a gut punch on the US/China front that could have a major ripple impact that the Street is fearing as they digest this threat from the White House.
My take: Stating the obvious, sparing no metaphors.