Core Viewpoint - The recent tariff relief for Apple Inc and NVIDIA Corporation has provided temporary relief from potential import cost increases, but uncertainties remain regarding future tariffs and their impact on profitability [2][6]. Group 1: Apple Inc - Apple Inc's stock has been affected by new tariffs imposed on Chinese goods, but the exemption for electronic devices has alleviated some pressure [2][6]. - Apple plans to produce over 30 million iPhones in India to meet a significant portion of American demand, which accounts for one-third of global demand [3]. - Despite the tariff relief, Apple faces challenges in shifting production from China, where most iPhones are currently manufactured, and may encounter retaliation from China [4][5]. - The company argues for increased semiconductor production in the U.S. to create high-value jobs, but a complete separation from China is unlikely due to skill shortages [5]. - Apple's stock is currently overvalued with a price/earnings (P/E) ratio of 27.4X forward earnings compared to the industry average of 26.05 [7]. Group 2: NVIDIA Corporation - NVIDIA has also benefited from tariff exemptions for critical chips produced in China, but the future remains uncertain depending on U.S. trade negotiations [8]. - The company is well-positioned for growth due to high demand for its GPUs and increasing spending on AI infrastructure, making it a more favorable investment compared to Apple [9][10]. - NVIDIA's stock is more affordable with a forward P/E ratio of 25.18, compared to the Semiconductor - General industry's 28.4X, leading to a Zacks Rank 2 (Buy) [11].
The Zacks Analyst Blog Apple, NVIDIA, Advanced Micro Devices, Amazon.com and Alphabet