Good morning, investors. Apple helped push the broad market higher on Wednesday, and the company made splashy headlines alongside President Trump. Yet there’s a quiet paradox at play with how much money Apple’s spending and how impressed investors have been.

Splashy investment with weak returns

Apple has now committed more capital to US manufacturing than any other company this year.

With its latest announcement at the White House, the tech giant has pledged $600 billion over four years as part of President Trump’s America-first agenda. 

Wall Street, however, hasn’t taken the gesture as a reason to bet on Apple itself. 

Including its 5.5% rally Wednesday, the stock is up just over 3% in the last 12 months — the weakest returns among its Magnificent 7 peers in that stretch. 

Even Alphabet, the second-worst performer of the last year, has more than tripled Apple’s gains. Nvidia, meanwhile, has added over 71%. 

In any case, Apple CEO Tim Cook confirmed the news alongside President Trump Wednesday afternoon, committing to developing new AI servers in Houston and buying made-in-USA chips.

The duo also announced a new initiative called the American Manufacturing Program and a $2.5 billion iPhone glass factory.

But there’s a reason investors have had a tepid appetite for Apple. Much of its “new” investment is simply existing spending plans it repackaged for optics, according to some commentators. 

And while some of Apple’s operations could shift to the US, it isn’t feasible for it to assemble iPhones at scale domestically.

The bulk of its supply chain remains rooted in China and India, putting Cook on a geopolitical tightrope. 

Currently, Apple faces more than $1 billion in quarterly tariff costs due to Trump’s levies, and that could increase if the White House moves forward with its Section 232-related tariffs on semiconductor products.

That same headwind has weighed on other technology companies this year.

“The reality is that Apple will need to move past these events before we can argue shares are likely to regain the momentum they exhibited in 2023-2024,” Morgan Stanley strategists wrote in a note August 1, adding that the stock will likely stay “range-bound” for the foreseeable future.

In effect, Apple’s mega-bet on US manufacturing is more of a hedge against a trade war than a step toward meaningful re-shoring of Apple products.

Even if the company does earn goodwill in Washington, markets will need more convincing.

Investors want to see growth, margin expansion and, importantly, momentum in the AI race — an area Apple has underwhelmed. 

Market snapshot

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Elsewhere

🚢 President Trump raised tariffs on India to 50%. He said India was fueling Russia’s “war machine” with its purchases of Russian crude: “I find that the Government of India is currently directly or indirectly importing Russian Federation oil.” (CNBC)

🐭Disney stock fell despite beating earnings expectations. It also raised its guidance for the year, and announced a deal between ESPN and the NFL Network. It also shared news of a $1.6 billion deal with World Wrestling Entertainment. (Barron’s)

📈 Palantir stock is up 565% in the last year. Its CEO’s prescient decisions to leverage geopolitical crises, technological trends, and Washington connections helped position the company for massive government contracts. (WSJ)

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Rapid-fire

• President Trump says he will impose a 100% tariff on all semiconductors coming to the US (Kobeissi Letter)

• President Trump plans to meet with Putin to discuss ending the Ukraine War (WSJ)

• Two Fed rate cuts would be reasonable this year, says Minneapolis Fed President Kashkari (Reuters)

• McDonald’s stock climbed 3.5% after seeing a rebound in sales (Yahoo Finance)

• E.l.f Beauty beat earnings expectations but its profits were down 30% from a year ago (CNBC)

• OpenAI will give the US government ChatGPT for $1 (CNBC)

• Uber is in talks with banks and private equity firms to fund its robotaxi business (Reuters)

• Match Group shares climbed 10% as the dating app reported upbeat guidance (CNBC)

Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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