Apple Anticipates Trade Strain, Scales Down Buyback Program

Apple has decided to reduce its share repurchase program by $10 billion, a move signaling a shift in financial strategy as the tech giant adapts to rising geopolitical and economic pressures. 

During a Thursday earnings call, CEO Tim Cook cautioned that U.S. tariffs could raise costs by approximately $900 million this quarter, as Apple adjusts its global manufacturing footprint in response to trade tensions linked to President Donald Trump’s policies.

Cook outlined that Apple’s planned $500 billion in U.S. investments would cover both infrastructure development and increased operational expenses. 

This includes building out domestic chip and server plants through partnerships. He also noted that Apple has proactively stockpiled enough devices to ensure that most products sold in the U.S. this quarter are not sourced from China.

“We were expecting to see more buybacks. Knowing the company, this indicates that Tim Cook is hoarding cash for difficult times,” said Thomas Monteiro, senior analyst at Investing.com. 

“While that’s not exactly a problem in itself, it certainly suggests that the company is not as certain about its near-term future as it was in previous quarters.” Following the announcement, Apple’s stock fell by 4.3%.

Related news: Apple Faces Investor Pressure Over Trade Risks and AI Setbacks Amid Weak iPhone Sales

Revenue Performance vs. Market Projections

Despite the external pressures, Apple’s sales remain solid. Cook confirmed that there was no noticeable rush among consumers to purchase Apple products in anticipation of potential price hikes. 

For the fiscal second quarter ending March 29, Apple posted $95.36 billion in revenue and $1.65 in earnings per share, surpassing LSEG estimates.

iPhone sales reached $46.84 billion, slightly above projections, while revenue from iPads and Macs stood at $6.40 billion and $7.95 billion, respectively. 

Entry-level iPads were particularly strong performers. However, wearables and accessories generated $7.52 billion, falling short of the $7.85 billion forecast.

Apple expects modest revenue growth—between low and mid-single digits—for the fiscal third quarter, in line with the projected 4.28% increase to $89.45 billion. Gross margins, however, are forecasted to dip to between 45.5% and 46.5%, slightly under analyst estimates.

Cook shared that most iPhones sold in the U.S. will now be manufactured in India, while iPads, Macs, and Apple Watches will largely come from Vietnam. He added, “What we learned some time ago was that having everything in one location had too much risk with it.”

Apple also announced a 4% increase in its dividend to 26 cents per share and revealed that its board had approved an additional $100 billion for share buybacks—though that’s a decrease from last year’s authorization.

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