Apple (NASDAQ: AAPL) achieved a remarkable 30% return in 2024, with shares peaking at approximately $259 in late December. Key contributors to this increase included robust sales growth in the services sector and heightened interest in new artificial intelligence (AI) capabilities. However, these positive developments have been clouded by ongoing economic uncertainty and trade tensions.

On April 2, President Trump announced a broad list of reciprocal tariffs that would elevate U.S. import taxes to the highest levels seen in a century. Although these tariffs have been temporarily paused for 90 days, a staggering 145% tariff on Chinese imports remains in effect. This situation poses significant challenges for Apple, as the majority of its iPhones are manufactured in China.

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As a consequence of these factors, Apple Stock fell by 33%, dropping to $172 per share by early April. Notably, Apple’s stock has previously experienced declines exceeding 30% from record highs four times over the past decade, yet it consistently rebounded within a year. Here’s what investors should keep in mind.

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Apple Stock Historical Performance Following Similar Declines

Since 2015, Apple Stock has recorded four significant declines of over 30% from its peak, excluding the current downturn. While past performance cannot guarantee future results, a consistent trend emerges: the Stock has historically recovered its losses and delivered impressive returns in the subsequent year.

• April 2015: Apple Stock reached its peak at $33 per share in April 2015 before falling 32% to $22.50 per share by May 2016. A lag in financial results, primarily due to weak iPhone sales, prompted this decline. However, as Apple expanded its services business, investor confidence returned. The Stock hit a new high in February 2017, resulting in a 73% return in the year following the first substantial close below its peak.
• October 2018: Apple Stock peaked at $58 per share in October 2018 before dropping 38% to $36 per share in January 2019. This downturn was largely attributable to trade tensions with China, culminating in significant tariff increases initiated by President Trump. Apple rebounded to a new high in October 2019, with a 74% return in the following year.
• February 2020: After peaking at around $82 per share in February 2020, Apple Stock fell 31% to $56 per share in March 2020 amid fears of the potential COVID-19 impact. Despite these uncertainties, Apple reached new heights again in June 2020 and returned an impressive 119% in the year after the initial 30% drop.
• January 2022: Apple Stock peaked at $182 per share in January 2022 before declining 31% to $125 per share by January 2023. This drop occurred during a bear market for the S&P 500, fueled by inflation concerns and rising interest rates. Nonetheless, Apple rebounded and achieved new highs by June 2023, with a 54% increase in the year following its initial 30% decline.

In summary, Apple Stock has experienced declines of over 30% from its high four times since 2015, with an average return of 80% following the first close below that benchmark. Using this historical average, Apple’s current share price of $172 as of April 8 could suggest a potential increase to $310 by April 2026, representing a 51% upside from its recent share price of $205.

However, it’s critical to consider that Apple’s stock performance will also depend on its financial results and the impact of tariffs imposed by the Trump administration, which have injected a degree of uncertainty.

Consequences of Tariffs on Apple’s Future

President Trump’s implemented tariffs total 145% on products imported from China, which is significantly more than the average tariffs during his first term. The precise effect of these duties on Apple, which manufactures around 80% of its iPhones in China, remains ambiguous due to frequently changing trade policies.

For instance, this past weekend, U.S. Customs and Border Protection issued a statement that seemed to exempt China-made smartphones, computers, and other electronics from these tariffs. However, by Sunday, the narrative shifted, with President Trump indicating that no exemptions would be granted, and electronics could face new tariffs in the coming months.

Additionally, Apple has significant manufacturing operations outside China, including in India, Japan, South Korea, Taiwan, and Vietnam. The tariff rates President Trump proposed for imports from these countries range from 24% to 46%. While these tariffs are currently delayed for 90 days, the uncertain situation hampers Apple’s operations as the company lacks clarity regarding future developments.

In addition to tariffs, Apple is contending with challenges related to its AI initiatives. The launch of Apple Intelligence, which introduced new AI features for iPhone models, has not stimulated the expected upgrade cycle. Consumers have appeared generally unimpressed with these enhancements.

Furthermore, a key upgrade anticipated from Apple Intelligence—an improved version of Siri—has been postponed due to internal complications. Analysts project some features might not be available until 2026 or 2027, according to Bloomberg.

Looking forward, Wall Street forecasts Apple’s earnings growth at 11% annually through fiscal 2026, concluding in September. This expectation leads to a current valuation of 30 times earnings.