Apple’s shares rose more than 3% Monday…
Trade war tensions between the U.S. and China are halted for the time being, which is good news for Apple investors. The company has come under the microscope over the past couple of months, causing its shares to fall in early June.
The company’s products have been largely unaffected by recent tariffs but there was a concern that popular Apple products could become a target if conditions worsened.
On Monday, Wedbush analyst Dan Ives gave Apple an Outperform rating and raised the company’s price to $235. The company’s shares were up 2.7% on Monday morning.
How Apple Is Affected by an Ongoing Trade War
As the trade war dragged on, Apple faced increasing pressure over the possibility of additional tariffs. The company is vulnerable to any conflict between the U.S. and China since it depends on China for manufacturing.
And nearly 20% of the company’s revenue comes from China. Many investors worried that Apple could lose up to $2 per share if the U.S. increased tariffs on China.
Over the weekend, President Trump announced he would delay imposing $300 billion in tariffs while the two countries resume negotiations. This will allow Apple to keep its prices unchanged.
According to Ives, the trade war resolution could add an additional $20 to $25 to Apple’s shares in the coming months. If that happened, it would bring the company’s market valuation back above $1 trillion.
What to Expect from Apple Going Forward
Things are looking up for Apple but the company is still vulnerable. Growth in China’s economy has slowed recently, which could negatively affect Apple’s revenue.
According to a Merrill Lynch analyst, Apple’s China app store has shown “significant deceleration” in June. And though negotiations between the U.S. and China have resumed, that doesn’t mean the trade war is entirely over.
However, the immediate risk does seem to be over for Apple. And the company’s shares have performed well in 2019 and are up more than 8% over the past year.
