10 AI Stocks Investors Are Monitoring After Tariff Shock

4. Apple Inc (NASDAQ:AAPL)

Number of Hedge Fund Investors: 158

Erik Woodring, an analyst at Morgan Stanley, said in a latest program on CNBC that while the impact of the latest tariffs on Apple Inc (NASDAQ:AAPL) is not yet clear, he sees an impact on the company’s volumes and margins if the iPhone maker has to raise its prices:

“How much of an impact is that going to have? We just don’t necessarily know. There’s a lot of unknowns right now. This is a time where we as analysts try to do our best to make predictions about whether it’s volumes, pricing, or margins. But at the end of the day, I think there has to be, even for a company like Apple, a pretty significant cut simply because the great unknown still exists.

When you look at the way stocks are moving today and think about us as consumers, if my iPhone, my MacBook, or any other product is 15, 20% more expensive, am I really going to buy it, or am I going to wait and determine if maybe there is some relief in the future? You just don’t know that.”

Apple’s last quarterly results were helped by Services revenue in the latest quarter, but the key challenges haunting the company remain as they were. Many analysts believe that just a few AI apps would not be enough to trigger a broader upgrade cycle for iPhone. Apple is dealing with currency headwinds as the stronger US dollar is expected to reduce top-line growth by 2.5% next quarter. For Q2 FY2025, management expects overall revenue to grow in the low to mid-single digits. Apple’s stock is trading at a premium valuation, with a price-to-earnings ratio of 39-40x, a price-to-free-cash-flow ratio of 33-34x, and a PEG ratio exceeding 3x. Upcoming quarters would be difficult for Apple and its current valuation is not justified.

Columbia Seligman Global Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:

“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”