Why Chip Stocks Are Rising Despite 100% Tariff Threat
11 minutes ago
Chip stocks rose on Thursday, the day after President Donald Trump said companies that manufacture in the U.S. or have committed to doing so will be exempt from 100% semiconductor tariffs.
“We’ll be putting a tariff of approximately 100% on chips and semiconductors. But if you’re building in the United States of America, there’s no charge,” Trump said during a White House press conference Wednesday afternoon. The tariffs were disclosed alongside Apple (AAPL) CEO Tim Cook, who appeared with Trump to announce plans to invest $100 billion in U.S. manufacturing, on top of the $500 billion committed earlier this year.
President Trump’s off-the-cuff announcement was light on details. For example, it was unclear whether existing commitments to manufacture in America would be sufficient, or if the president wants chipmakers to make new investments to win an exemption. It also remains unclear whether the tariffs and exemptions apply to electronics that contain semiconductors, or just the chips themselves, according to Jefferies analysts.
“We await full details likely in the next week or so before jumping to any conclusions, as it has always been a bad move to extrapolate too much from Trump’s words or social media post[s],” said Angelo Zino, senior vice president and equity analyst at CFRA Research.
Nonetheless, investors seemed to think Wednesday’s announcement removed a significant overhang for semiconductor stocks. The PHLX Semiconductor Index (SOX) was up 1.2% in recent trading. AI chip giants Nvidia (NVDA) and Broadcom (AVGO) were recently both up about 0.5%, though down from their earlier highs, while competitor Advanced Micro Devices (AMD) jumped 5%. Contract chip manufacturer Taiwan Semiconductor Manufacturing Co. (TSM) also advanced 5%, and manufacturing equipment maker Applied Materials (AMAT) rose more than 2%.
“From a high level, the 100% headline number seems intimidating, but in practice we expect a much lower impact,” wrote Bank of America Securities analysts in a note on Wednesday.
U.S.-based companies with domestic manufacturing capacity, such as Intel (INTC), Micron (MU), and Texas Instruments (TXN), should not be affected by the tariffs, according to Citigroup analysts. And fabless chip designers, including giants Nvidia, AMD, Broadcom, and Qualcomm (QCOM), should also be able to avoid the tariffs by contracting with major foundries like TSMC, Samsung, and GlobalFoundries (GFS), all of which have U.S. manufacturing facilities.
“If Taiwan Semi does get a full exemption … it would bode well for the broader tech semiconductor/hardware ecosystem and our positive stance on the space,” Zino of CFRA said.
Even European semiconductor companies without a U.S. presence are expected to be spared the 100% levy. The EU-U.S. trade deal announced late last month capped semiconductor tariffs at 15% and guaranteed zero-for-zero tariffs for semiconductor equipment makers like Netherlands-based ASML (ASML).
European Commission spokesperson Olof Gill on Thursday reportedly said the Trump administration had guaranteed that the 15% cap established by the trade deal would not be overwritten by other tariffs.
Peloton Stock Volatile After Surprise Profit, Layoff News
1 hr 15 min ago
Shares of Peloton Interactive (PTON) swung wildly Thursday after the connected fitness company said it swung to a surprise fiscal fourth-quarter profit and announced a restructuring plan that includes layoffs.
Peloton, known for its stationary bikes and other exercise equipment, reported a GAAP profit of 5 cents per share when a loss of 5 cents per share was expected by analysts surveyed by Visible Alpha. Revenue of $606.9 million fell 6% year-over-year but topped estimates.
“Our operating expenses remain too high, which hinders our ability to invest in our future,” CEO Peter Stern wrote in a shareholder letter. “Today, we are launching a cost restructuring plan intended to achieve at least $100 million of run-rate savings by the end of FY26 by reducing the size of our global team, paring back indirect spend, and relocating some of our work. This is not a decision we came to lightly, as it impacts many talented team members, but we believe it is necessary for the long-term health of our business.”
For fiscal 2026, Peloton sees revenue of $2.4 billion to $2.5 billion, with the midpoint above consensus estimates.
Peloton shares advanced as much as 14% this morning but were down about 2% recently.
Has Apple Cracked the Code on Avoiding Tariffs?
1 hr 54 min ago
If there’s a playbook companies can follow to avoid more tariffs, Apple (AAPL) may have found it.
President Donald Trump said yesterday that the iPhone maker and other companies like it could be exempt from future semiconductor tariffs, based on its recent investments in U.S. manufacturing, in a major win for Apple after a tough start to the year dogged by worries about tariffs and its progress in AI.
“The good news for companies like Apple is if you’re building in the United States or have committed to build—without question committed to build in the United States, there will be no charge,” Trump said yesterday, after Apple CEO Tim Cook joined the president at the White House to announce a $100 billion pledge to invest in U.S. manufacturing, adding to a $500 billion investment announced in February.
Demetrius Freeman / The Washington Post / Getty Images
The move will see Apple making more of its components domestically, though it stopped short of promising full-fledged production stateside, suggesting companies don’t actually need to move all of their operation to the U.S. to win similar exemptions.
Cook also isn’t the only major tech CEO who’s managed to score some concessions from the Trump administration after a high-profile visit to the White House.
Nvidia (NVDA) CEO Jensen Huang, who reportedly met with Trump yesterday as well, has made a number of visits to the White House in the past few months, with some signs of success in winning Trump’s favor. The chipmaker said last month that it’s looking forward to obtaining approvals to resume sales of key AI chips to China, after Trump tightened export restrictions earlier this year, citing national security concerns.
Shares of Apple were up about 3% at $189 in recent trading, extending yesterday’s 5% gain ahead of the company’s announcement.
Wall Street analysts widely cheered the move by Apple, with Bank of America analysts raising their target to $250 from $240, while JPMorgan analysts called Cook’s moves a “masterclass in managing geo-political uncertainty,” and reiterated their price target at $255.
Wedbush analysts led by longtime Apple bull Dan Ives said it was a “strategic poker move for Cook,” and maintained their Street-high target of $270.
Eli Lilly Shares Slide on Disappointing Drug Trial
3 hr 18 min ago
Ely Lilly (LLY) shares sank Thursday after the pharmaceutical firm reported disappointing results from a late-stage study of its experimental obesity pill. The news offset Lilly’s strong quarterly results.
The stock was down 14% recently, trading at its lowest level since early last year.
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The company said in a Phase 3 trial, patients taking a 36 milligram dose of its oral GLP-1 drug, orforglipron, without food and water restrictions showed an average weight loss of 12.4%, or 27.3 pounds, in a 72-week period. That’s below the 15% average weight loss of rival Novo Nordisk’s (NVO) Wegovy injectable treatment. Some on Wall Street were looking for orforglipron to come in closer to that level.
In an interview with CNBC, Lilly CEO David Ricks argued that the company wasn’t disappointed with the results even though they were “one or two points below what (the) Street had.” Ricks added the goal was to create a pill that was convenient to take, could be made on a huge scale, and would provide weight loss that was competitive with other GLP-1 medicines, “and that’s what we’ve achieved.”
The company said it plans to seek regulatory approval of orforglipron by the end of the year.
Along with the orforglipron announcement, Lilly released its second-quarter financial data Thursday, reporting adjusted earnings per share of $6.31, with revenue up 38% year-over-year to $15.56 billion. Both exceeded Visible Alpha forecasts by a wide margin.
The gains came from soaring demand for its current weight-loss drug, Zepbound, which had a 172% jump in sales to $3.38 billion. Sales of another GLP-1, Mounjaro, used to treat both obesity and Type-2 diabetes, were up 68% to $5.20 billion.
Lilly raised its full-year adjusted EPS range to $21.75 to $23.00, compared to the earlier estimate of $20.78 to $22.28. It sees revenue of $60 billion to $62. billion, versus the previous outlook of $58 billion to $61 billion.
Intel Shares Slip as Trump Calls for CEO to Step Down
4 hr 14 min ago
Intel (INTC) shares fell in early trading Thursday after President Donald Trump called for new CEO Lip-Bu Tan’s resignation.
“The CEO of INTEL is highly CONFLICTED and must resign, immediately,” Trump wrote on his Truth Social network. “There is no other solution to this problem.”
Earlier this week, Sen. Tom Cotton (R-Ark.) sent a letter to Intel Chairman Frank Yeary in which he wrote that “Mr. Tan reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms. At least eight of these companies reportedly have ties to the Chinese People’s Liberation Army.”
Andrej Sokolow / Picture Alliance / Getty Images
Tan formerly was CEO at Cadence Design Systems (CDNS), which recently pleaded guilty in a criminal case involving sales to China during his tenure.
Tan assumed the CEO role at the struggling chipmaker in March. Late last month, it was reported that Intel was looking to spin off its networking unit as it moves to shed assets under Tan.
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Intel shares were down about 2% in recent trading. The stock price is near unchanged in 2025, after shedding 60% of its value last year.
Major Index Futures Poised to Open Higher
5 hr 10 min ago
Futures linked to the Dow Jones Industrial Average were up 0.4%.
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S&P 500 futures rose 0.6%.
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Nasdaq 100 futures added 0.8%.
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