2025’s been a rollercoaster ride for many US stocks, but the Apple (NASDAQ:AAPL) share price certainly appears to have a case of whiplash. As tariff announcements emerged, the business seemed to be caught between a rock and a hard place.
The American government is pushing for the firm to return manufacturing to the US – a task that isn’t easy. Even without the expensive cost of migrating production, management also needs to avoid upsetting the Chinese government, which is growing increasingly hostile towards US firms in this latest trade war.
Some relief was provided when new exemptions on tariffs for smartphones, computers, and chips emerged, delivering a double-digit rally in the Apple share price. But despite the boost in valuation, the stock’s still down almost 20% since the start of the year. And if the trade war with China escalates, there could be room for further declines.
However, with so much fear plaguing the US stock market right now, could this actually be a terrific buying opportunity for long-term investors? Let’s take a look at the revised forecasts from analysts.
Outlook still seems encouraging
In the worst-case scenario, analysts have projected that the sweeping tariffs imposed by the US worldwide could cost Apple anywhere up to $38bn a year. That’s about a quarter of the firm’s projected earnings for 2026 and is definitely worrying.
However, it’s important to note that this figure isn’t set in stone. And if trade negotiations with the US start to yield results, the actual cost could be considerably smaller. In the meantime, the group’s investments in artificial intelligence (AI) technology are expected to spark a new era of growth for the business, if it can deliver. As a result, several leading analysts have actually maintained their Buy ratings for the stock despite all the market turmoil.
Bank of America has placed a $250 a share price target, while Morgan Stanley estimates the fair value for Apple sits at $252. Bernstein’s more optimistic with a $260 target, while KeyBanc Capital Markets is more pessimistic, at $170 a share.
Overall, the average consensus across all 42 Wall Street analysts projects a $249.44 price tag for Apple shares 12 months from now. That’s around 24% higher compared to where the technology stock is currently trading. So if investors were to put £1,000 to work right now, they could have around £1,240 by this time next year.
Taking a step back
Even if Apple manages to avoid supply chain and tariff disruptions, the business remains sensitive to the economic environment. The firm’s products are notoriously priced at a premium. And if a recession were to emerge, as some investors fear, it could adversely impact demand for the firm’s flagship products like the iPhone, even with all the AI upgrades.
All things considered, Apple appears to face a lot of short-term challenges that could see its share price fall further. After all, even after its recent tumble, the stock still trades at a premium forward price-to-earnings ratio of 27.6. However, the long-term outlook for this business appears to remain intact.
This isn’t the first time management has had to navigate a hostile trade environment between the US and China. And personally, I remain optimistic, making Apple a business worthy of a closer look, in my opinion.
