Apple shares plunge as analysts warn US tariffs to squeeze profits

Shares of iPhone maker Apple AAPL.O slump 7.5% to $207.16 premarket after Trump announces reciprocal tariffs

Trump said on Wednesday he would impose a 10% baseline tariff on all imports to the U.S. and higher duties on dozens of other countries including China

*Rosenblatt Securities says AAPL could face $39.5 bln in tariff costs, potentially reducing profits by 32% on an annualized basis

Brokerage adds, co needs a 40% price hike on devices to offset tariff costs and Samsung 005930.KS might gain a competitive edge

*BofA Global Research cuts PO to $250 from $265; says that if tariff rates stand and Apple absorbs cost impact, co could see EPS squeezed by $1.24 in 2026

Jefferies expects $500 billion U.S. investment may help secure tariff exemptions; AAPL was exempted in 2018 during Trump's earlier administration

In February, AAPL said it would spend $500 billion in U.S. investments in the next four years, including a giant factory in Texas for AI servers

"We believe such a (investment) commitment will likely help AAPL obtain tariff exemption" - Jefferies

Currently ~15% of iPhones (~35 million units) are assembled in India, 85% assembled in China, and about 33% of global iPhone sales are to the U.S. (76 million), Jefferies estimates

However, in a worst-case tariff scenario, brokerage projects AAPL's FY25 net profit would decline by 14%

Up to last close, AAPL had fallen 10.5% YTD