Apple (AAPL -0.59%) has been a winning investment over time as it's become a consumer goods giant, with more than 2.2 billion active devices installed worldwide. The company sells the iconic iPhone, Mac, and other products that consumers flock to -- even if their prices are higher than those of rivals. That's because Apple has built a strong brand, which has become part of its moat or competitive advantage.
This has helped the company to grow earnings significantly, into the billions of dollars over time, and the stock price has advanced more than 500% over the past decade. But in recent months, Apple has faced one particular challenge: It produces its products outside of the U.S.
With import tariffs potentially ahead, earnings may suffer. As a result, some investors have fled Apple shares, leading the stock to an 18% decline in the first half of this year -- and a lower valuation.
Is Apple a buy, sell, or hold in 2025?
Image source: Getty Images.
Apple's market position
First, I'll consider the positive, negative, and everything in between. As mentioned, Apple has built a very solid market position, selling products that consumers love. Its flagship iPhone can be seen in the hands of many around the world.
In the first quarter of 2025, iPhone models took the top four spots in Counterpoint Research's list of the best-selling smartphones globally. In addition, iPhone models also took top spots last year and the previous year.
This has helped power Apple's revenue higher and, thanks to the great number of active devices worldwide, the company also has been able to increase its sales of services to users -- such as cloud storage or digital entertainment. In fact, services revenue has soared to records quarter after quarter, showing that services could be the next big revenue driver for this market giant.
However, Apple shares reached a rough patch earlier this year when President Donald Trump originally announced his plan to impose tariffs on imports. This is a major concern for Apple since it produces most of its iPhones in China, a country the U.S. has placed great focus on as it constructed a tariff plan. Apple and its peers haven't yet significantly felt the impact of tariffs since the U.S. exempted electronics from the duties -- but the exemption is temporary, suggesting this challenge could pop up at any point.
Attention from the president
To make matters worse, the president has targeted Apple specifically, saying if the company doesn't bring iPhone production to the U.S., it may face a 25% tariff on all iPhone imports. Meanwhile, Apple announced plans to move production of U.S.-destined iPhones to India from China, but the problem with this is goods from India also will face import tariffs.
All of this has weighed on Apple stock, resulting in the decline this year.
It's important to keep in mind that, though Trump has singled out Apple, the company isn't facing this problem alone. Most U.S. tech giants rely heavily on manufacturing abroad and, like Apple, could see costs rise if they bring that production to the U.S.
This isn't an Apple-only headwind, but one that may impact much of the tech industry -- and this point is what could prove to be positive for Apple. It's unlikely the U.S. would apply tariff levels that would be destructive for an entire industry, especially since this industry has played a strong role in powering economic growth.
The importance of tech companies
Technology stocks are heavily weighted in the S&P 500, meaning that if they sink, the entire market would suffer. And these companies not only generate high revenue, but also have been spending billions to expand in recent times. All of this is positive for the overall economy.
I'm optimistic that the worst-case scenario won't play out and Apple won't face growth-crushing costs. That said, news in the coming weeks and months could continue to weigh on the stock -- unless the company and Trump reach a reasonable agreement on tariffs and production, something that could boost the shares.
Considering all of this, what's an investor to do?
It's impossible to say exactly when Apple will rebound, but I'm all for buying or holding Apple shares in 2025. As mentioned, it's unlikely the company will face extreme tariff levels and today, the stock looks cheap at 29x forward earnings estimates.
Apple's strong moat and financial situation should help the company handle the challenges ahead. All of this means now is a great time to get in on the stock for a low price -- and potentially win over the long haul.
