From a note to clients by analyst Daniel Ives that landed on my desktop Monday:
Apple and China trade situation are joined at the hip. Given Apple’s high exposure to China from both a demand and supply chain perspective with its flagship Foxconn factory front and center, a potential draconian tariff on iPhones and related components would have been a tough gut punch to absorb for Cupertino (and its investors)…
While the next few weeks will be key for this potentially ground breaking agreement between the two countries to get sealed and remove a black cloud over the market and tech space, our near-term take is that the additional tariff around iPhones and laptops is now off the table, no further supply chain disruption will be on the horizon, closer cooperation around the growing IP theft issue in China is front and center and a potential positive for US tech vendors.
Maintains Outperform rating and $215 price target.
My take: Ives has jumped the gun, but that doesn’t make him wrong.