Is Apple Still a Smart Investment After Its Surge?

After a sharp 12% rally in just five trading days, the Apple stock is still down nearly 6% year-to-date. The question now is whether Apple’s underlying strengths are enough to sustain this momentum and drive its share price higher. Let’s take a closer look:

From Asia to America: Inside Apple’s Shift Amid Tariff Pressure

The Trump administration has escalated its push for American technology manufacturing, announcing a plan to impose roughly 100% tariffs on all semiconductor chips imported into the United States. However, tech companies committing to domestic production will be exempt — a significant reprieve for Apple and other electronics manufacturers that have long relied on global supply chains.

For years, Apple’s assembly lines and component sourcing have been concentrated in China, India, and Vietnam. The administration is unequivocally warning that companies must reshore production or be subjected to steep new trade barriers. The political backdrop is also shifting, with Trump recently increasing tariffs on India — a country where Apple assembles most of the iPhones sold in the U.S.

In response, Apple has pledged to dramatically scale up its U.S. presence, committing $600 billion in domestic investment over the next four years. This $100 billion plan builds on an earlier $500 billion commitment made earlier this year. Central to the initiative is a new American Manufacturing Program, aimed at fostering the repatriation of production by Apple’s suppliers and partners. Apple anticipates this program will directly result in 20,000 new jobs and indirectly support additional employment throughout its extended supply network.

CEO Tim Cook underscored Apple’s commitment, stating, “We’re going to keep making investments right here in America, keep hiring in America, and keep building technologies at the heart of our products right here in America because we’re a proud American company, and we believe deeply in the promise of this great nation.”

Part of Apple’s plan is to create a U.S.-based chip supply chain. The company expects to produce more than 19 billion chips in 2025, manufactured across 24 factories in 12 states. This is a strategic move to secure critical components against future trade shocks and aligns with Washington’s push for semiconductor independence. Apple plans to expand its U.S. manufacturing effort with companies like Corning, Texas Instruments, and Amkor Technology among others.

However, the challenges are considerable. Industry experts warn that large-scale electronics assembly in the U.S. is hindered by higher labor costs, a shortage of skilled manufacturing workers, and the fact that many key suppliers remain in Asia. Fully assembling iPhones in the United States is unlikely in the near term. Instead, Apple will focus on manufacturing high-value components domestically while continuing to assemble final products overseas — a compromise the Trump administration appears to accept for now.

Despite the hurdles, Apple’s exemption from Trump’s reciprocal tariffs — including the newly announced 25% levy on Indian imports — shields the company’s most important product line from immediate cost increases. For investors, the shift could mark the beginning of a long-term strategic repositioning, potentially strengthening Apple’s political standing in Washington while reshaping its global supply network.

Services Shine, iPhones Surge, but Apple’s Growth Story Faces New Hurdles

Apple’s latest quarterly results helped cement the momentum behind its remarkable 12% share price jump over just five trading days, fueled by renewed optimism in the U.S. market. The June quarter showcased a powerful, if complex, performance story. iPhone sales surged more than 13%—their strongest growth in years—as U.S. consumers rushed to buy devices ahead of potential price hikes from looming tariffs. The introduction of a more affordable iPhone earlier this year (the iPhone 16e) added extra fuel to demand.

This demand push brought quarterly revenue to $94 billion, up about 10% year-on-year, easily beating Wall Street forecasts. The tariff impact—20% on imports from China—did take a bite out of profitability, but Apple mitigated the hit by accelerating shipments from India. Gross profit margins came in above expectations, and China, a market where sales had been declining, posted a 4% revenue rebound.

Beyond hardware, Apple’s services segment continued to deliver solid results, growing 13% to $27.4 billion. This arm of the business, covering the App Store, iCloud, paid apps, advertising, and search royalties, has grown fivefold since 2015 and now generates gross margins above 70%, compared to around 30–40% for hardware. Bank of America analysts note that Apple’s decision to break out services performance in financial reports helped investors justify paying a higher earnings multiple for the stock.

Still, challenges remain. The very factors that bolstered iPhone sales this quarter—tariff fears and aggressive promotions—may not repeat. Growth in services has also moderated after its pandemic-era surge, while regulatory clouds are forming. Apple faces a potential earnings hit if Google’s lucrative default-search contract in Safari is altered or removed, as well as pressure to allow alternative payment channels for apps, potentially undercutting App Store revenue. Meanwhile, the company has yet to present a convincing AI strategy that can match rivals like Microsoft and Meta, both of which are already showing tangible AI-driven revenue gains.

With a new, slimmer iPhone rumored for September at a higher price point, Apple is clearly looking to support margins and sustain its growth narrative. Whether that is enough to maintain the stock’s upward momentum will depend on how well it navigates its regulatory challenges and AI positioning in the months ahead.

Sources: Apple, The White House, CNBC, CNN, The Wall Street Journal, ActivTrades