Bank of America unveils shocking Apple stock target before earnings

Warren Buffett bet at the right time again. Last year, the Oracle of Omaha sold a significant portion of Berkshire Hathaway’s Apple holdings, adding more cash to the conglomerate ahead of this year's market chaos.

Despite its strong ecosystem and customer base, Apple (AAPL) stock has seen increased volatility amid a market sell-off caused by tariffs. The stock is down 16.8% year-to-date.

The $3 trillion tech giant is more vulnerable to tariffs than other firms since most of its production is based in China, which earlier faced tariffs as high as 145%. On April 11, the

Trump administration gave Apple and other tech firms a break by exempting smartphones, computers, and other electronics from the tariff hikes placed on imports from countries, including China.

"I speak to Tim Cook. I helped Tim Cook, recently, and that whole business," Trump said on April 14.

Even with iPhones temporarily spared from the steep tariffs, Apple faces other headwinds.

What are Apple’s problems?

Trump’s decision to exclude smartphones and other electronics from tariffs was meant to give companies more time to bring production back to the U.S., according to the White House. But it would not be easy or quick.

Apple is working to reduce its reliance on China by boosting iPhone production in India, but replicating China’s operations is proving difficult.

India's labor laws mean Apple has to hire extra workers, and its subassembly lines there struggle with higher costs and quality problems. At the same time, tensions between China and India have slowed equipment exports that Apple needs, according to The Information.

Apple is also facing pressure from iPhone sales.

Apple’s share of the global smartphone market slipped one point to 18% in 2024, while Chinese Android brands Oppo, Xiaomi, and Vivo together took a combined 30%, according to Counterpoint Research.

That pressure was seen in Apple’s latest earnings report on Jan. 30. Though the company achieved record revenue and profit for its fiscal first quarter ending Dec. 28, 2024, iPhone sales, which still accounted for more than half of total revenue, fell nearly 1% to $69.14 billion.

Sales in Greater China, Apple's largest international market, dropped 11% amid stiff competition from local brands and regulatory restrictions on Apple's Intelligence features.

Apple will release its next earnings on May 1.

Analysts lower Apple stock price target ahead of earnings
Bank of America analysts led by Wamsi Mohan have lowered the firm's stock price target for Apple to $240 from $250, while keeping a buy rating.

The analysts expect Apple to report upside to March and June quarter revenues from tariff-driven demand shifts. However, they lowered projections for later quarters as higher supply-chain costs are expected to weigh on earnings.

AI remains a problem for Apple, the analysts added.

"Apple's launch of an AI-enabled Siri has been delayed and can cause a further pushout of iPhones upgrades, and we cut our F26 estimates to reflect this delay," the firm said, though it added that China iPhones could be launched with AI partnerships earlier.

Still, the analysts maintained a buy rating, given the temporary stay in tariffs as well as Apple's "resilient earnings, improving gross margins, and strong capital return."

The firm also noted that the launch of a slim iPhone "Air" in September 2025 and a potential foldable iPhone in September 2026 could spur replacement demand.

Apple closed at $208.37 a share on April 24.