Tim CookSource: Apple

What you need to know

  • An analyst says that Apple stands to lose more than most in the 'Cold Tech War' going on between the U.S. and China.
  • Dan Ives at Wedbush says Apple and Tesla are 'disproportionately impacted' by the issues.

A new report from Wedbush analyst Dan Ives says that Apple and Tesla stand to lose more than most in the ongoing 'Cold Tech War' raging between the U.S. and China.

In a recent investors note first shared by 9to5Mac Ives writes:

Tesla and Apple remain in the crossfire on the ongoing Cold Tech War. While the current tensions have many implications for US companies/consumers, the two US companies disproportionately impacted by this Cold Tech War are clearly Apple and Tesla. Apple has nearly all its iPhone production within China as part of its flagship Foxconn factory and Chinese consumers represent roughly 20% of all iPhones sold worldwide. Tesla on the other hand has built its flagship Giga factory in China with the country poised to represent ~40% of all global deliveries sold by 2022. So far, the bark has been worse than the bite relative to the backlash and negative impact on both Apple and Tesla in China, however this remains a clear risk in the broader US/China brewing Cold Tech War

According to Ives, its heavy reliance on China for its manufacturing of devices like the iPhone 12, as well as its large revenue base in the country could serve to cause some concern, however, he notes that the "bark has been worse than the bite" in terms of material impact so far. He says the issue remains a "clear risk".

Ives retained an 'outperform' rating for Apple's stock price, setting an ambitious target of $185, it is currently trading around $126.