Apple Shares Drop 5% Amid Buyback Reduction and Tariff Concerns

Apple Inc. (AAPL) shares fell 5% on Friday, closing at $205.35, after the company announced a $100 billion stock buyback—$10 billion less than the previous year's authorization—and warned of a $900 million cost impact from U.S. tariffs this quarter. Investors reacted negatively to the reduced buyback and potential tariff-related expenses, leading to a significant drop in market value.

Details:

• Buyback Reduction:
  Apple's announcement of a $100 billion stock repurchase plan, down from $110 billion the previous year, surprised analysts who expected the company to maintain or increase its buyback authorization. The reduction signals a more cautious approach amid economic uncertainties.

• Tariff Impact:
  CEO Tim Cook disclosed that U.S. tariffs could add $900 million in costs this quarter, potentially affecting earnings per share by five cents. Apple is accelerating its supply chain diversification, shifting iPhone production from China to India to mitigate tariff effects. 

• Earnings Report:
  Despite reporting Q2 earnings of $1.65 per share on revenue of $95.36 billion—surpassing expectations—Apple's forecast of low-to-mid single-digit revenue growth raised concerns about future performance. 

• Market Reaction:
  The stock's decline reflects investor apprehension over the reduced buyback and tariff-related costs. Apple's market capitalization decreased by over $150 billion, and the stock is down approximately 20% year-to-date.