Apple Declines as Foxconn Partners with Nvidia for AI Development in Light of Trump's Policy Changes—'Evolved Beyond Its Traditional Business'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 19 2025
0mins
Should l Buy AAPL?
Source: Benzinga
Foxconn's Business Shift: Foxconn's AI server division has surpassed its iPhone assembly business in revenue for the first time, with a significant growth of 47% year-over-year in Q2 2025.
AI Server Revenue Growth: The Cloud & Networking Products division generated NT$731.8 billion ($24.32 billion), while the Smart Consumer Electronics division earned NT$634.5 billion ($21.08 billion). AI servers now contribute over half of cloud revenue.
Expansion and Diversification: Foxconn is increasing AI server production in the U.S. and diversifying into electric vehicles, semiconductors, and healthcare robotics, moving away from reliance on Apple as its primary customer.
Partnerships and Industry Impact: Collaborating with Nvidia, Foxconn is developing next-gen server architectures and AI technologies, which may influence the performance of ETFs focused on AI and data centers.
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Analyst Views on AAPL
Wall Street analysts forecast AAPL stock price to rise
32 Analyst Rating
19 Buy
11 Hold
2 Sell
Moderate Buy
Current: 261.730
Low
230.00
Averages
299.69
High
350.00
Current: 261.730
Low
230.00
Averages
299.69
High
350.00
About AAPL
Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, and Wearables, Home and Accessories. Its software platforms include iOS, iPadOS, macOS, watchOS, visionOS, and tvOS. Its services include advertising, AppleCare, cloud services, digital content and payment services. The Company operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. It also offers digital content through subscription-based services, including Apple Arcade, Apple Fitness+, Apple Music, Apple News+, and Apple TV+. Its products include iPhone 16 Pro, iPhone 16, iPhone 15, iPhone 14, iPhone SE, MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, Mac Pro, iPad Pro, iPad Air, AirPods, AirPods Pro, AirPods Max, Apple TV, Apple Vision Pro and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Market Performance: By the end of last year, the S&P 500 had risen 16%, achieving three consecutive years of at least 16% growth, indicating a robust market recovery and rising investor confidence.
- Tariff Policy Impact: Trump's tariff policy led to a 10.5% drop in the S&P 500 within two days of its announcement, marking the fifth-largest two-day decline since 1950, reflecting the market's high sensitivity to policy uncertainty.
- Earnings Quality Concerns: Despite the market's historically high valuation, the second-highest P/E ratio (39-41) raises concerns about earnings quality, as many companies rely on non-sustainable income sources to maintain profits, potentially undermining long-term investor confidence.
- Challenges for Apple and Tesla: Apple masks its lack of real earnings growth through stock buybacks, while Tesla relies on automotive regulatory credits and interest income, which account for 63% of its pre-tax income, highlighting the earnings quality crisis facing market leaders.
See More
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- Increased Market Volatility: Despite a 16% rise in the S&P 500 in 2025, Trump's tariff policy triggered a 10.5% drop in just two days following its announcement on April 2, marking the fifth-largest decline since 1950, indicating the policy's detrimental impact on investor confidence.
- Earnings Quality Concerns: The tariffs imposed by Trump in 2018-2019 had a lasting negative effect on U.S. companies, with affected firms experiencing declines in labor productivity, employment, sales, and profits from 2019 to 2021, suggesting that current tariffs could replicate these adverse outcomes.
- Rising Inflation Pressure: Since the implementation of tariffs, the U.S. inflation rate has increased, with import duties raising production costs for certain businesses, leading to higher consumer prices and diminishing the likelihood of the Federal Reserve lowering interest rates, which could hinder economic growth.
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- Pause on Tech Security Measures: Ahead of the Trump-Xi Jinping meeting, the Trump administration reportedly paused several critical technology security measures targeting China, a decision that could influence the future trajectory of U.S.-China tech relations and reduce market uncertainties.
- Apple Court Victory: Apple secured a courtroom win as a jury rejected claims from Optis Wireless that it infringed on 4G wireless patents, a result that will help protect Apple's intellectual property and strengthen its market position.
- AI Industry Developments: Elon Musk criticized AI startup Anthropic for alleged bias while announcing a $30 billion funding round that pushed its valuation to $380 billion, highlighting the intense competition and rapid evolution within the AI sector.
See More
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- Chinese Market Performance: Despite a 23% year-over-year decline in smartphone sales in January 2026, Apple managed to maintain its market share, demonstrating resilience in a competitive environment, as noted by Counterpoint Research, which attributed the overall market drop to changes in promotional strategies.
- Political Bias Controversy: CEO Tim Cook received a letter from FTC Chairman Andrew Ferguson expressing concerns over alleged political bias in Apple News, claiming systematic promotion of left-leaning content while suppressing conservative publications, which could impact the company's reputation.
- Legal Victory: Apple secured a significant legal win against Optis Wireless, with a jury dismissing claims that Apple infringed on its 4G wireless patents, a result that not only alleviates legal risks for Apple but also strengthens its position in the wireless technology market.
- Siri Feature Delay: Apple’s stock dipped 1.2% following reports of a potential three to four-month delay in new Siri features, with Gene Munster from Deepwater Asset Management noting that this news could affect investor confidence in Apple’s future innovation capabilities.
See More
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- American Express Earnings Analysis: American Express reported Q4 earnings of $3.53 per share, falling short of expectations and causing a more than 10% drop from its early January peak; however, its total revenue still grew 9% year-over-year, indicating resilience in its affluent customer base, with projected earnings per share of $17.30 to $17.90 in 2026, reflecting the company's optimistic outlook.
- Apple Sales Growth: Apple's fiscal Q1 iPhone sales surged 23% year-over-year to $85.3 billion, despite a slight stock decline due to market focus on AI; consumer anticipation for future AI tools is driving sales, showcasing the company's strong performance in the tech sector.
- Constellation Brands Challenges: Constellation Brands, a smaller position in Buffett's portfolio, has grown to a $2 billion stake since its initial purchase in late 2024, facing declining beer sales over the past four quarters; however, a recovering economy is expected to drive growth, with a current dividend yield of 2.5%.
- Market Sentiment Impact: Despite the stock price declines of American Express and Apple due to market pessimism, their fundamentals remain strong, suggesting that investors should focus on long-term potential rather than short-term fluctuations.
See More
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- American Express Earnings Highlights: Despite fourth-quarter earnings of $3.53 per share falling short of expectations, leading to a more than 10% drop from early January highs, the company's total revenue still grew 9% year-over-year, showcasing the resilience of its affluent cardholder base and an expected recovery in growth.
- Apple Sales Rebound: Apple's fiscal first-quarter iPhone sales surged 23% year-over-year to $85.3 billion, driven by consumer anticipation for future AI tools, despite concerns surrounding its technology sector, indicating strong market demand.
- Brewer Investment Opportunity: Berkshire Hathaway's investment in Constellation Brands began in late 2024 and grew to a $2 billion stake by mid-2025; although the company faces declining interest in alcoholic beverages, a recovery in the economy is expected to boost its business.
- Market Sentiment Impact: The stock price fluctuations of American Express and Apple reflect broader market pessimism, with analysts suggesting that this dynamic could reverse as investors reassess the companies' fundamentals, presenting potential investment opportunities.
See More
