Tariff Risks Could “Blow Up” Apple, While Amazon’s AWS Growth Remains Back-End Loaded

Introduction

Recent commentary from Wedbush analyst Dan Ives has raised serious concerns about the impact of new U.S. tariffs on Apple Inc. (NASDAQ:AAPL). Ives warned that the tariffs could cost Apple an estimated $39.5 billion, potentially reducing its operating profit and EPS by around 32% on an annualized basis. In a separate report, Mizuho expects Amazon Web Services (AWS) revenue to be “back-end loaded” in 2025, as early sales show softness and competitive pressures increase.

Key Takeaways

• Apple Under Tariff Pressure:

  • Wedbush analyst Dan Ives lowered Apple's price target from $550 to $315.

  • Ives estimates that tariffs—54% on China and 32% on Taiwan—could cost Apple roughly $39.5 billion.

  • The cost pressures stem from Apple's heavy reliance on Chinese and Vietnamese manufacturing.

• Amazon's AWS Growth Outlook:

  • Mizuho projects that AWS revenue will be “back-end loaded” in 2025 due to initial softness in sales momentum and increased competition, particularly from Google Cloud Platform.

  • AWS is targeting a full-year growth of 20% YoY, but early performance suggests a delayed ramp-up.

Detailed Analysis

Tariff Impact on Apple

Wedbush analyst Dan Ives has issued a stark warning: the current U.S. tariff policies could severely damage Apple's profitability. With 90% of iPhones—along with significant portions of Macs, iPads, Apple Watches, and AirPods—produced in China, the imposition of tariffs at 54% for China and 32% for Taiwan is expected to dramatically increase costs. Ives argues that to offset these expenses, Apple might need to pass on a price hike of around 40% to consumers—a move likely to depress demand. Even with efforts to diversify production to countries such as Vietnam, India, and the U.S., the transition would be costly and time-consuming. Ives' analysis suggests that these factors could result in a substantial decline in both operating profit and EPS.

Back-End Loaded Revenue for AWS

Meanwhile, Mizuho's research indicates that AWS's revenue growth in 2025 will be more pronounced later in the year. Early signals show that sales cycles have slowed modestly, particularly in sectors like financial services. To address this, AWS has introduced new pricing incentives for AI inferencing, including discounts ranging from 10% to 20% for long-term customers. However, increased competition—especially from Google Cloud—has pressured short-term performance. Mizuho expects AWS's revenue growth to be “back-end loaded,” meaning that the full benefits of its investments, particularly in AI capabilities, will only materialize later in the fiscal year.

Real-Time Data Insights

To monitor these developments, consider these real-time data resources:

• Balance Sheet Statements API
  Track Apple's financial health and assess how increased costs from tariffs might affect its balance sheet.

• Financial Growth API
  Analyze revenue and earnings growth trends for AWS and other key tech players to understand the long-term impact of current market conditions.

Conclusion

The potential for tariffs to dramatically increase costs poses a significant risk for Apple, as highlighted by Dan Ives. At the same time, the anticipated back-end loading of AWS revenue growth suggests that while Amazon's cloud business faces near-term challenges, it could deliver strong performance later in the year. These contrasting scenarios underscore the complex environment in which U.S. tech giants are operating.