Wall Street hasn't bought into Apple's $600 billion bet on US manufacturing

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.

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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. 

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.

“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. 

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