Heightened volatility and extreme news-driven sentiment in the markets are leading to quick whipsaws of 3% or more in either direction daily. These swings of quick drops to quick pops are getting traders addicted to the idea that tariff-related macro uncertainties will resolve smoothly in the end. 

Despite the markets approaching bear market territory in March, the market is rallying on the hope that geopolitical tensions will ease. Meanwhile, analysts are revising estimates under the hood with cautious notes that these issues will not disappear overnight. The reality of what it will take to move supply chains will eventually settle in. 

Below, we dig into early commentary from executive teams and analyst observations in early March and April pointing to growing uncertainty on customer behavior and demand, supply chain challenges, and how this sets the stage for Q1’s earnings season and beyond. 

Consumer Electronics in Focus as Analysts Estimate Apple’s Impacts 

Apple will be a central player in the potential tariff impacts, being nearly a pureplay in the consumer electronics sector with heavy reliance on China. 

Apple’s diverse global supply chain exposes it to multiple tariffs of different rates depending on production location, with iPhone production concentrated in China but also located in India and Brazil. Apple is said to have quickly shipped 600 tons of iPhones, or ~1.5 million worth nearly $2 billion, from India before tariffs were implemented, while also increasing production of the iPhone 16e in Brazil to avoid higher Chinese tariffs, 

As to how tariffs could impact Apple and its prices, analysts broadly see higher prices on the horizon, regardless of whether Apple passes tariffs on or works to bring manufacturing to the US to avoid paying tariffs.  

Wedbush analysts estimate that onshoring iPhone production to the US could increase iPhone prices to $3,500, assuming it would cost $30 billion over 3 years to bring just 10% of its supply chain onshore.  

BofA estimated that based on higher labor costs alone, iPhone 16 Pro prices could rise at least 25%, from $1,199 to $1,500 -- this does not even account for higher chip prices or higher component prices.  

In a report from earlier this week, Citi estimated that iPhone prices would rise 7% globally “if China/India total tariffs are 45%/10%, assuming another 25% tariff on Apple products exported from China to the US through Section 232, and Apple (passing) all tariff costs to end customers.”  

However, on Wednesday morning, the administration floated the idea of China tariffs to a baseline 50%-65%, above Citi’s estimates and likely to further inflate prices.  

Other analysts see much higher prices even if Apple passes on the entirety of the tariff burden to consumers -- Rosenblatt estimates that iPhones could be up to 43% more expensive, while Counterpoint Research estimates prices could be up to 30% more depending on manufacturing location.  

Evercore estimates Apple could face a $9-10 billion impact to COGS at an effective tariff rate of 16%, which they expect would impact full-year EPS by  (7%), or $0.51.  

Price hikes to this degree could negatively shock demand, with the smartphone market already on thin footing this year. Global smartphone shipments rose 1.5% YoY in Q1, per IDC, though the group said this was due to a supply-side surge in shipments ahead of tariffs. 

IDC said this dynamic “effectively inflated Q1 shipment figures beyond levels anticipated based on underlying consumer demand trends alone,” adding that heightened geopolitical tensions between the US and China and growing tariff uncertainties were a “strong reason for concern” for 2025 growth.  

TrendForce estimated that the “best case scenario will see the smartphone market flat at best” in 2025, while the “worst case scenario is a production decline by as much as 5% YoY.”  

The PC market is in a similar situation as smartphones, with shipments rising in the high single-digits in Q1, again with the increase driven by vendors stockpiling rather than strong consumer demand.  

IDC recently cut its PC forecast for the year, seeing 3.7% growth in global shipments and just 0.2% growth in consumer shipments, as tariff-driven price hikes “combined with subdued demand are leading to a negative impact within the largest market for PCs.” Canalys expects that “subsequent quarters this year are likely to see a slowdown as inventory levels normalize and customers face higher prices,” even as the Windows 10 end-of-life and upgrade cycle looms.

Auto Facing Rapidly Shifting Tariff Policy, Uncertainty 

Auto executives united this week to lobby against the 25% tariff the sector faces, saying the tariffs will upend the global supply chain and cause a domino effect of higher prices for consumers, lower vehicle sales and higher repair costs. On April 23, the administration noted that Trump was considering exempting auto parts from tariffs on China imports, though the separate 25% tariff would remain and go into effect on May 3.  

Ford already warned dealers that it anticipates increasing prices for May production, after halting shipments of US-made vehicles to China due to the high tariffs. Notably, Tesla walked back on its growth guidance for 2025 this week, while auto-exposed semi Aehr warned of uncertain customer behavior and demand.   

Aehr, Tesla Pull Guidance on Tariff Uncertainty 

Reporting shortly after tariffs were announced at the start of April, semi small-cap Aehr provided some insight into the auto market, an important first look considering its high customer concentration with Onsemi.  

Aehr’s management believes the company will not face significant impacts from tariffs, though the main concern they echoed was that the real challenge “is not being able to control near-term secondary effects on our current and potential new customers, such as possible near-term delays in customer orders or requested delivery dates.” Because of the broader impacts to the customer ordering behavior, supply chain and shipment delays, and tariff implementation, Aehr pulled its guidance and stated they would re-evaluate as they get more clarity. 

On Tuesday, Tesla also pulled its guidance in similar fashion, stating that it is “difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services.” Tesla also shifted its tone on vehicle growth for 2025, first saying in Q4 that it expects to return to growth in 2025, but now saying the growth outlook would be revisited in Q2. A company statement added that the rapidly changing policy “could have a meaningful impact on demand for our products in the near term.” 

Significant Downward Revisions Hit Tesla After Q1 

Tesla sits at the crossroads of consumer demand and China tensions. The company’s Q1 report revealed margin weakness once again, along with a large revenue and EPS miss. Tesla’s estimates for 2025 have already faced substantial pressure over the last four months, and that’s before additional industry-wide growth concerns rose with tariffs. 

Automotive gross margin (excluding regulatory credits) declined more than 1 point QoQ to 12.5%, while operating margin dropped to just 2.1%. As a result of the nearly $2 billion revenue miss and contracting margins, adjusted EPS declined (40%) YoY to just $0.27, missing the $0.42 consensus by a wide margin. This weighed heavily on growth expectations for 2025, as EPS generation was expected to improve significantly through the rest of the year. 

In just the first day after Q1’s report, Tesla already witnessed a major haircut to growth expectations for both revenue and EPS. 2025 revenue was revised $10 billion lower to $96.8 billion, for a (1%) YoY decline, while EPS was revised more than $0.50 lower to $1.98, for a (20%) YoY decline. 

Tesla’s 2025 revenue and EPS estimates were already under pressure, but the stock saw additional negative revisions after Q1’s double miss. Source: YCharts 

Consider that at the start of 2025, Tesla was expected to see nearly 20% YoY revenue growth and 30% YoY EPS growth. After just the first quarter, Tesla’s revenue has been revised a total of $20 billion lower and EPS more than $1.20 lower, marking a significant erosion of growth even before tariff impacts on costs and demand are felt.  

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Indirect Tariff Impacts Arise for Big Tech  

From Big Tech, we’re seeing some indirect tariff impacts arise, notably from major Chinese retailers pulling ad spending on Meta and Google. 

PDD’s Temu and Shein both are drastically reducing ad spending in the US, after the end of the ‘de minimis’ exemption on packages from China valued at less than $800 earlier this month. Temu reportedly “axed all spending on Google’s Shopping platform since April 9,” while data showed that its daily ads run on Google plunged 99.9% to just 14, down from 30,000 to 60,000 at the beginning of April. 

Across popular social media platforms including X, YouTube, and Meta’s platforms, Temu reduced spending “by an average of 31% in the two weeks leading to April 13 compared with the previous month,” per SensorTower. Shein’s daily ad spending “across Meta, TikTok, YouTube and Pinterest fell 19%” over the same period. However, SensorTower noted that Temu’s ad spend had risen so quickly, that even after the reductions, it was still above 2024’s level.  

For Meta, China accounted for ~11% of revenue in 2024 at $18.4 billion, while for Google, YouTube accounted for more than 10% of revenue at $36.1 billion. Lost spending from two popular retailers could potentially lead to billion-dollar revenue impacts that then weigh on EPS.  

Over the past month, Meta has seen 2025 revenue estimates move more than $2 billion lower to $186.4 billion, and EPS estimates (2%) lower to $24.90, now pointing to growth of just 4.4% YoY. Google’s impacts are more limited at this time, with revenue and EPS each revisions under (1%). 

Since tariffs were implemented in early April, Meta and Alphabet stocks have seen negative revenue and EPS revisions. Source: YCharts 

AI Semis, Hardware 

Recent reports from across the AI hardware industry, from semis to servers, point to an uncertain environment stemming from tariffs ...