Apple (AAPL) is courting President Trump with a new $100 billion manufacturing investment, but questions remain over whether the move will deliver real benefits to shareholders. “Be very careful not to confuse good political posture with what’s going to happen in the actual operations of the business,” Threadneedle founder and Apple shareholder Ann Berry said on Yahoo Finance’s “Opening Bid.”
On Wednesday, the tech giant announced it would invest $100 billion in U.S. manufacturing. CEO Tim Cook attended a press conference at the White House, where President Trump also announced that he would impose 100% tariffs on semiconductors produced overseas unless the companies involved commit to building factories in the United States.
"The good news for a company like Apple is that if you are building a factory in the United States or have committed - no doubt a commitment - to build a factory in the United States, you will not be taxed," Trump said.
Apple shares were up 0.4% before the open on Friday after closing up 3% on Thursday. The stock has fallen 12% this year as investors worry the company is falling behind in the artificial intelligence race.
Berry noted that Cook's political involvement is good for shareholders because it "helps build relationships with powerful decision-makers." But investors shouldn't confuse Cook's political goodwill with real impact.
The key question for investors is whether Apple's investment significantly reduces its tariff risk. Although Apple has moved some iPhone assembly operations to India and explored alternatives in countries such as Vietnam, it still relies on Chinese factories for its semiconductor packaging business and most of its core hardware production.
Berry stressed that expanding domestic production capacity - especially at Apple's scale - will take years. She noted that the timeline for obtaining permits, building factories, recruiting and training workers, and starting mass production could extend beyond the next three and a half years. In addition, tariff policies may also change during this period.
"I highly doubt Apple will break ground on a new factory on a large scale," Berry said, meaning it likely won't significantly change Apple's near-term supply chain risk exposure.
Despite the uncertainty about the outlook, some on Wall Street welcomed the news. Bank of America analyst Vamsi Mohan raised his price target on the company to $250 from $213, citing upside potential if Apple receives a tariff exemption.
Mohan said if the U.S. government grants Apple a waiver, the company could reduce its expected $1.1 billion adverse impact in the fourth quarter, although specific details remain unclear. The move could also bolster confidence in Apple's gross margin expansion, which Bank of America expects will hit 50%.
The agency also pointed out that if competitors such as Samsung (SSNLF) or Google (GOOG) face high import tariffs and Apple is exempted, it may further tilt U.S. market share towards Apple, which may boost iPhone sales.