Key Points
According to Bank of America, Apple needs to raise around 9% to mitigate the impact of the tariffs introduced by President Donald Trump. Apple was under the microscope amid ongoing tariff debate.
According to Bank of America, Apple will need to raise prices by around 9% to mitigate the impact of the tariffs introduced by President Donald Trump. The company predicted that the tech giant would need to raise the price of iPhones, iPads and other products by that amount, assuming that all products are subject to at least 10% tariffs. Analyst Wamsi Mohan warned that no matter how the company’s revenues react, it could be a hit. Wamsi’s analysis predicts the impact of Trump’s sweeping plans on imports, coming as a scramble on Wall Street and Main Street as well. These concerns were ratched after the president signed a memorandum of understanding last week imposing “mutual tariffs” on foreign countries. Apple was under the microscope amid ongoing tariff debate. Stocks fell earlier this month after Trump announced a 10% tariff in China, the country where Apple builds most of its products. Bank of America’s Mohan reviewed scenarios where Apple would continue to price the same in the US or raise them as a result of tariffs increasing costs. If Apple doesn’t raise prices, he said he would lose 26 cents in earnings per share (3.1%) in the 2026 calendar year. Meanwhile, he said an approximately 3% increase in price would lower earnings per share. It corresponds to 2.4% slides of 21 cents over the same period. This is because analysts assume that higher prices will reduce the number of devices Apple sells by 5%. But if the higher price tag doesn’t reduce sales, the tariff hit could be even smaller, Mohan said. With this in mind, Mohan said a 9% price hike is necessary, coupled with a potential hit to sales volumes, to offset the burden of tariffs. According to Mohan, Trump’s mutual tariff plans resolved Apple’s potential workarounds to avoid slapping Apple’s potential workarounds on China. Most iPhone models are now available for manufacture in India, but the mutual tax is expected to be higher than the 10% rates faced by China. According to analysts, around 15% of IPHONE is currently being produced in India after changing manufacturing in India. Despite these calculations, Mohan repeated its purchase ratings at Apple, saying tariffs appear to be “manageable.” His $265 price target means an 8.4% upside over the end of Tuesday. Stocks rose slightly during Wednesday’s session, bringing their losses from the start of the year to 2.3%. On Wednesday, Apple unveiled an inexpensive iPhone 16E model that is powerful enough to run artificial intelligence. Aapl ytd mountain apple, up to the year
