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Investing.com - Several Wall Street analysts have praised Apple (NASDAQ:AAPL)’s pledge this week to spend more on its domestic manufacturing operations, arguing that it could help the tech giant navigate possible tariff-related tensions with the White House.
CEO Tim Cook joined Trump in Washington on Wednesday to unveil a commitment to devote $100 billion in additional investment into the United States.
Cook particularly highlighted the California-based iPhone maker’s drive to increase its American manufacturing presence and bring much of its vast supply chain back to the U.S. Cook said he was taking Trump’s call for Apple to reshore its operations "very seriously."
Shares in Apple were higher by more than 2% in extended hours trading on Thursday after jumping by over 5% a day before.
"Apple’s commitment to U.S. manufacturing should exempt the company from sectoral tariffs on semiconductors and we think clarity surrounding this overhang should be an incremental positive for Apple stock," analysts at Evercore ISI said in a note.
Analysts at UBS agreed that Apple should benefit a "carve-out" from the tariffs, calling it the "best outcome" for the company. But they warned of "growth challenges" ahead for the iPhone. Many customers rushed to purchase iPhones in the June quarter to avoid potential trade-related price hikes, the analysts said, adding that relief from the tariffs could cause this surge to ebb.
"While difficult to quantify the impact going forward, if Apple is carved out sharply reducing the risk of an iPhone price hike, near-term demand could ease a bit ahead of an expected iPhone 17 launch in the fall," the UBS analysts said.
Apple previously announced earlier this year that it was planning to plug $500 billion in fresh investments into the U.S., adding that it would hire some 20,000 workers over the next four years and construct a new plant in Texas focused on the creation of the machines needed to undergird its artificial intelligence ambitions.
Still, Apple has yet to bring all the manufacturing processes of its flagship iPhone to the U.S., despite Trump’s claim in May that he would put a 25% tariff on imported smartphones. Instead, Apple has shifted some of its iPhone production from China to Asian nations like India and Thailand.
But Cook has largely handled the tariff situation in a manner that shows he is "10% politician and 90% CEO," Wedbush analysts Daniel Ives said in a note, adding the fresh investment vow is a "good strategic poker move."
"[T]imes like this he will be using his strong ties globally to make sure its smoother waters for Cupertino ahead despite concerns around Apple’s growth initiatives with Trump heading down the ’America First’/tariff path," Ives wrote.