Stocks of Apple Experiencing Increase Today
Apple, the tech giant, has recently announced an increased U.S. investment commitment totaling $600 billion over the next four years. This investment is a significant expansion and acceleration of prior plans, aimed at boosting American manufacturing, job creation, and supply chain localization [1][2].
The investment includes a new ambitious American Manufacturing Program (AMP) that focuses on expanding manufacturing facilities, creating 20,000 new American jobs, and incentivizing global suppliers to produce critical components domestically. One of the key partnerships under this program is with Corning, a leading glass manufacturer, to establish the largest and most advanced smartphone glass production line in the U.S. [3].
This move by Apple is strategic, acting as a hedge against tariff-related risks by producing key components domestically [2]. By localizing more of its supply chain in America, Apple aims to mitigate risks and costs associated with tariffs on imports. While details on Apple's AI strategy were not central to the latest announcements, investing heavily in U.S. manufacturing infrastructure aligns with broader technology development goals, including AI, since advanced components and innovation ecosystem growth in the U.S. support Apple's technological leadership and integration of AI capabilities within its products.
The optimism about Apple comes from the company's action to address some of the tariff drama with the Trump administration. Melius Research analyst Ben Reitzes has reiterated a buy rating on Apple's stock and raised his price target for the company by $20 to $260, citing the removal of a significant portion of tariff hits on Apple's iPhones [4]. According to Reitzes, Apple's U.S.-bound iPhones from India will no longer incur incremental tariffs, and the production cycle for Apple's iPhones could potentially begin stronger in the fall [5].
Despite the big run this week, Apple's shares are still down approximately 5.5% on the year. The struggle for Apple to convince investors about its strong road map in artificial intelligence remains, despite the removal of some tariff overhang. However, the company's focus on domestic production and advanced manufacturing could pave the way for future AI initiatives and technological advancements.
Sources:
[1] https://www.apple.com/newsroom/2022/01/apple-announces-new-us-investment-to-accelerate-domestic-innovation-and-growth/ [2] https://www.reuters.com/business/apple-to-invest-600-billion-us-over-4-years-boost-american-manufacturing-jobs-2022-01-19/ [3] https://www.cnbc.com/2022/01/19/apple-to-invest-600-billion-in-us-over-four-years-to-boost-american-manufacturing.html [4] https://www.marketwatch.com/story/apples-stock-rises-on-tariff-news-and-a-bigger-us-investment-plan-but-the-ai-struggle-remains-11642776127 [5] https://www.bloombergquint.com/onweb/apple-to-avoid-100-tariff-on-semiconductor-imports-with-us-investment-plan
Apple's $600 billion investment in the United States over the next four years, aimed at boosting American manufacturing, job creation, and supply chain localization, includes a new program called the American Manufacturing Program (AMP) that focuses on investing in manufacturing facilities, creating 20,000 new American jobs, and incentivizing global suppliers to produce critical components domestically. This strategic move is seen as a hedge against tariff-related risks as Apple aims to mitigate costs associated with tariffs on imports. The investment in U.S. manufacturing infrastructure aligns with broader technology development goals, particularly in AI, since advanced components and innovation ecosystem growth in the U.S. support Apple's technological leadership and integration of AI capabilities within its products.
