CNBC’s Jim Cramer told investors not to sell Apple even after shares fell on Thursday after reports that China banned iPhone use for its government employees.
Greater China, including Hong Kong and Taiwan, is Apple’s third-largest market, making up 18% of total revenue, CNBC reported. The country is also where the majority of Apple products are assembled. Cramer admitted that a ban like this could lead to a huge hit for Apple’s earnings. However, he pointed to the company’s ability to adapt to a new economic landscape.
“Why doesn’t anyone else publicly say that, you know what? Maybe Tim Cook, the CEO, can come up with something that offers a compromise, given that Apple’s one of the largest employers in China, and the country needs all the employment it can get,” Cramer said, referencing China’s weaker-than-expected economic report last month.
Cramer noted that Apple and many of its mega-cap tech peers continually find success not because of a single hit product, but rather because they are able to adapt. He pointed to Google parent Alphabet, which found fresh success in Youtube and a cloud infrastructure offering, as well as Amazon, which has obviously grown well beyond its beginnings as a bookseller.
To Cramer, investors who choose to sell Apple shares now may miss out on stock surges prompted by a new iPhone release or new content not yet announced.
“Apple can reinvent itself in another way if China somehow becomes problematic because that, not its excellent phones, is how it got to be a $3 trillion business in the first place,” Cramer said.
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