Apple's $1000 Billion U.S. Investment Boosts Stock 13%

Apple Inc. successfully navigated a significant political challenge, announcing a substantial investment plan that not only garnered praise from Donald Trump but also resulted in a remarkable 13% surge in its stock price over the week. This performance marked the company's best single-week gain since July 2020.

The strategic move involved Apple committing to an additional 1000 billion investment in the U.S., building on the 5000 billion four-year expenditure plan announced in February. This new initiative, dubbed the American Manufacturing Plan (AMP), aims to bring more of the supply chain and advanced manufacturing processes to the U.S., with a focus on establishing a complete end-to-end semiconductor chip supply chain. By pledging such a significant investment, Apple effectively mitigated the threat of potential tariffs that could have doubled the cost of imported chips.

Despite the ambitious nature of the investment plan, specific details remained somewhat vague. The CEO acknowledged that the final assembly of iPhones would continue to be conducted overseas in the short term. Trump also noted that establishing a complete iPhone production line in the U.S. was not a short-term goal.

The announcement had an immediate and positive impact on Apple's stock price, which rose 4% to 229.35 dollars by the end of the week. This surge added over 4000 billion to the company's market capitalization, bringing it to 34000 billion dollars. This performance solidified Apple's position as the third-largest company by market value globally, trailing only NVIDIA and Microsoft.

Prior to this dramatic turnaround, Apple's stock had been underperforming. Over the three months leading up to this week, Apple's stock lagged behind the Nasdaq index by approximately 20 percentage points, marking one of the weakest relative performances in the past two decades. Market sentiment had been extremely pessimistic, with the stock price consistently trading below its 200-day moving average and approaching critical support levels between 195 and 200 dollars.

The extreme market conditions set the stage for a strong rebound, which many market observers saw as a classic example of an oversold bounce. By the end of the week, there was significant buying pressure, with investors heavily purchasing call options. Apple's stock price also outperformed the Nasdaq by more than 10%, reaching a five-year high.

This strategy of using public investment commitments to avoid political risks has become a well-established tactic for Apple in dealing with U.S. government pressures. In 2018, during Trump's first term, Apple had promised to invest 3500 billion in the U.S. economy over five years, successfully avoiding product tariffs at the time. In November 2019, Trump and the CEO visited a Flex factory in Texas, where the Mac Pro is produced. Despite the factory having been operational since 2013, Trump hailed it as a significant milestone, calling it a "very special day."

The new 1000 billion investment commitment is widely seen as another shrewd political maneuver. While there are doubts about the specifics and authenticity of Apple's investment figures, the consensus on Wall Street is that Apple has traded public support for U.S. manufacturing for exemption from potential punitive tariffs. This allows the company to maintain its global supply chain without significant disruption, while also gaining political favor.

From a commercial and investment perspective, the CEO's strategy has once again proven successful. HSBC noted in a report that Apple's plan "supports a scenario where the status quo is maintained, and Apple's profits are not further impacted." Gene Munster of Deepwater Asset Management stated, "Apple will not assemble products in the U.S., which is good news for investors as it means profit margins will remain stable in the coming years." Wamsi Mohan of Bank of America Merrill Lynch suggested that if competitors face tariffs while iPhones are exempt, Apple could further increase its market share in the U.S. smartphone market.

The successful White House visit was underpinned by Apple's strong fundamentals. On July 31, Apple reported a 10% increase in overall revenue and a 13% increase in iPhone sales for the June quarter, exceeding market expectations. The CFO noted that the number of active devices installed in all regions reached an all-time high during the previous quarter.

Looking ahead, the market anticipates the release of the iPhone 17 series in early September 2025. Historical data shows that Apple's stock price typically rises by more than 10% in the month leading up to a new product launch, providing a reference point for future price movements. While Apple may appear to be lagging in the artificial intelligence sector, the CEO has reassured employees that the company, though not an early mover, will ultimately control AI. Analysts caution against underestimating Apple's potential to succeed in new innovation areas, given its history of entering markets later but achieving success through its robust distribution network and ecosystem.