Tariff-Sensitive Stocks Apple and Nike Are Getting Clobbered. Time to Buy?

Core Viewpoint - The ongoing trade war and tariffs are significantly impacting companies like Apple and Nike, leading to stock declines and increased market volatility. Both companies face challenges in navigating these tariffs while trying to maintain profitability and growth. Group 1: Apple - Apple is heavily exposed to tariffs, particularly in China, which is crucial for both manufacturing and sales [2][10] - Following a temporary pause on tariffs, Apple stock initially surged but then fell 4% due to news of a potential 145% tariff on Chinese goods, threatening near-term profitability [3][4] - Investors are considering buying Apple stock based on the belief that the company can adjust its supply chain to mitigate tariff impacts or that tariffs may ease [4][7] - Apple's growth in the high-margin services segment and stock repurchases have helped offset slowing iPhone growth [5][6] - The company has not made significant advancements in artificial intelligence, raising concerns about its pricing power [6][7] Group 2: Nike - Nike's stock has been underperforming, with year-to-date losses exacerbated by tariff issues, and it is now near its lowest level in a decade [8][10] - The company has struggled with a shift from wholesale partnerships to direct-to-consumer sales, which has not performed as expected [9][10] - Nike relies heavily on manufacturing in China, Vietnam, and Indonesia, with Greater China accounting for 15.1% of total revenue during the nine months ended February 28 [11][12] - Despite challenges, Nike has maintained a history of dividend increases and stock buybacks, with its yield reaching a 10-year high of 2.8% [13] - The stock's valuation has become less appealing if tariffs persist, impacting earnings [13][14] Group 3: Investment Considerations - Both Apple and Nike are seen as potential investment opportunities, with the understanding that they face significant tariff risks and have not experienced rapid earnings growth recently [14][15] - Apple is viewed as a safer investment, while Nike presents higher risk with potential for greater reward if it can successfully navigate its challenges [15]