Market Insights

Apple’s $300 Billion Loss: Worst Decline Since the Pandemic Start

Amos Simanungkalit · 04 Apr 202533.6K Views

Image Credit: MSN

Tech stocks took a sharp hit on Thursday, with Apple (AAPL) leading the "Magnificent Seven" stocks lower after President Trump's announcement of new reciprocal tariffs the day before.

Apple experienced its worst day since March 2020, plunging over 9%, which wiped out more than $310 billion from its market capitalization. Analysts believe the biggest risk for Apple lies in its reliance on overseas production hubs, which are particularly vulnerable to the newly imposed tariffs. On Wednesday, Trump revealed tariffs affecting around 185 countries, including the US’s largest trading partners.

These new tariffs include a 34% tariff on Chinese imports, 20% on European Union imports, 46% on Vietnamese imports, 32% on Taiwanese imports, and 26% on imports from India, all set to take effect on April 9. Notably, the 34% tariff on China will be added to the existing 20% tariff, pushing China’s total tariff rate to 54%. Since China is Apple's main production base, where about 85% of iPhones are made, this move poses a significant threat.

“Apple manufactures nearly all of its iPhones in China, and the key issue will be whether exceptions or exemptions to the tariff policy can be made if companies like Apple expand production in the US, as it announced in February,” said Dan Ives, a Wedbush analyst.

As trade tensions escalate, Apple has already started diversifying its supply chain, boosting manufacturing in countries like India and Vietnam. However, with these countries also impacted by the new tariffs, there is little room for relief.

“The concern will be on pricing and margin impacts, as well as the broader effects on the global supply chain,” Ives noted. He added that major negotiations will likely take place in the coming months as companies adapt to the evolving tariff landscape. For now, he expects tech stocks to remain under significant pressure.

Other "Magnificent Seven" stocks also saw large declines. In total, these stocks lost more than $1 trillion in market value, according to Bloomberg data. Amazon (AMZN) and Meta (META) both saw drops of around 9%, similar to Apple, while Nvidia (NVDA) fell 8% and Tesla (TSLA) dropped 5%. Alphabet (GOOGL) was down 4%, and Microsoft (MSFT) fell by over 2%.

Outside the "Magnificent Seven," semiconductor stocks also suffered, despite an exemption for semiconductors from Trump's new tariffs. Nvidia competitor Broadcom (AVGO) lost over $70 billion in market value, with an 11% drop in shares.

“The implications of these tariffs are far-reaching, with significant negative effects for the entire semiconductor sector,” said John Vinh, a KeyBanc analyst. “Key markets like smartphones, iPhones, and PCs will see reduced demand as manufacturing is heavily concentrated in China.”

Bernstein’s Stacy Rasgon also pointed out that the biggest challenge for semiconductors is not the direct impact of the tariffs themselves, but the potential demand destruction as products become more expensive. “Semiconductors are highly cyclical, global, and closely tied to macroeconomic factors and GDP,” Rasgon explained. “If this leads to a recession, it could be detrimental to the sector.”