Apple Earnings Updates: Tariff Impact, Supply Chains, iPhone Production

Looming tariff risks for Apple are likely going to drive investor questions around its massive exposure to China’s manufacturing industry, according to Anurag Rana, senior industry analyst at Bloomberg Intelligence.

“Apple’s sourcing strategy will likely remain the most discussed topic on its 2Q earnings call given the company’s high dependency on China for both assembly and components,” Rana said in a note last week.

Rana said that while Apple’s products have been exempted from Trump’s tariff list, there is still a risk that those surcharges return.

Bank of America reiterated its “Buy” rating on Apple, citing the company’s resilient earnings, stable cash flow, and potential benefit from incorporating AI on its devices.

Still, the company’s earnings estimates for the current quarter could take a “more severe” hit due to tariffs, particularly if tensions between the US and China escalate, BofA analysts wrote.

“However, we note that Apple has many options to mitigate downside risk to estimates. These include: sourcing more iPhones from India, applying higher pricing in products/services, pressuring its supply chain for better economics, introducing new products at higher price points and changing cadence of product releases,” the bank added.

Analysts issued a $250 price target for the stock, implying a 17% upside from current levels.

As Apple’s biggest revenue driver, iPhone sales have always taken center stage during Apple’s earnings, and the flagship product will be even more in focus this time around.

Investors will look for clues about the success of the cheaper iPhone 16e handset released in February. They’ll also look for indications from the company about the role of its AI-focused services, bundled up as Apple Intelligence, in spurring interest in new devices.

Apple has also had a harder time getting new iPhones into pockets in its most important international market, China, as domestic players like Huawei have tried to entice consumers with advanced phones rivaling the iPhone with an aggressive pricing strategy.

iPhone pricing is a key focus at a time when China tariffs have raised concerns among analysts that higher costs could be passed on to consumers.

— Hasan Chowdhury

Angelo Zino, senior equity analyst at CFRA Research, said a pull-forward in consumer demand as a result of buyers getting ahead of tariffs should help Apple beat Wall Street’s revenue growth expectations of 4% when it reports results.

“We look for revenue growth to have exceeded Mar-Q expectations of 4%, partly reflecting demand pull-ins in the U.S. given policy uncertainty, especially for higher-priced products where tariff risk is greater,” Zino said in a note last week.

CFRA rates Apple at “Buy” with a $235 price target.

One day before earnings, Apple lost a key legal battle over its App Store rules. A federal judge ruled that Apple violated a 2021 court order by making it too hard for app developers to point users to alternative payment options — and by slapping a 27% fee on outside purchases.

The judge even referred Apple and one of its executives to federal prosecutors for potential criminal contempt, saying they may have misled the court.

It’s a blow to Apple’s high-margin Services business, which includes the App Store, and has been a major source of growth. Expect analysts to ask how this could impact revenue and whether Apple will be forced to loosen its grip on developers.

— Pranav Dixit

JPMorgan said Apple’s second-quarter results should remind investors just how resilient the iPhone maker is amid rising macroeconomic uncertainties.

The bank increased its quarterly revenue estimates for the company by more than $2 billion, to $95.8 billion from $93.5 billion, partly due to the company’s likely increased sales ahead of potential tariffs.

Analysts also said Apple’s stock price decline this year de-risks it to a degree, with its price now more attractive for investors. Apple stock is down 15% year-to-date.

The bank issued an “Overweight” rating on the stock with a $245 price target, implying a 14% upside from its current level.

Apple’s earnings come amid rising US-China tensions, sparked by President Donald Trump’s tariffs of up to 145% on imports from the country. The trade war poses risks for Apple, which makes about 90% of its products in China.

To mitigate those risks, Apple is reportedly accelerating its shift to India, aiming to significantly ramp up iPhone production there by 2026. But analysts caution that manufacturing in India costs Apple 5% to 8% more than it does in China, potentially squeezing margins and adding logistical hurdles.

Expect investors to press Apple executives on how quickly and efficiently they can scale operations outside China.

— Pranav Dixit

Analysts at Goldman Sachs said investors will be looking to hear answers to six key questions:

How will tariffs impact margins and demand?How has the recently launched iPhone 16e performed?What are Apple’s new product releases for the rest of 2025?How has Apple’s competition in China evolved?What’s next for Apple Intelligence?How could Google’s antitrust lawsuit impact Apple’s revenue?

As for the actual results, Goldman analysts expect Apple to beat earnings per share expectations of $1.61 and revenue expectations of $94.0 billion in the quarter.

Second quarter

Third quarter

Capital expenditure estimate: $2.55 billion

Full-year 2025

Capital expenditure estimate: $10.77 billion

Source: Bloomberg