Investing.com -- S&P Global Ratings has given its ’AA+’ issue-level rating to the senior unsecured notes of Cupertino-based tech giant, Apple Inc (NASDAQ: AAPL ). The proceeds from these notes will be used by Apple for various corporate purposes such as funding share repurchases, paying dividends, and repaying debts. The rating of these new notes is at par with the S&P’s long-term issuer credit rating on Apple. The company’s other ratings remain unchanged.

In its fiscal second quarter that ended on March 29, 2025, Apple reported a 5% increase in revenue year over year, reaching $95.4 billion. This growth was backed by a 2% year-over-year increase in iPhone revenue and a robust 12% year-over-year surge in services revenue. The company saw an expansion in revenue across all regions, except for Greater China where it experienced a 2% fall.

S&P Global Ratings continues to assess the influence of tariffs on Apple’s operations. The company’s supply chain is significantly exposed to China and, to a lesser extent, India and Vietnam. Apple’s present iPhone production in India doesn’t meet its domestic demand in the U.S., leading to the expectation that its iPhone imports from China will be subject to tariffs. The current anticipation is that Apple will transfer any increased costs to its customers if tariffs persist. This could potentially extend the iPhone replacement cycle and negatively impact overall iPhone sales unless telecom carriers introduce more generous incentives to balance the tariff-associated increases. Long-term sales in China, which represented 17% of Apple’s total revenue in the fiscal year 2024, could be at risk if the tariff dispute is not resolved.

Despite these challenges, Apple’s strong credit metrics and substantial net cash position provide it with a significant buffer to expedite the diversification of its supply chain into regions with lower tariffs, although this is likely to take time. Therefore, it is expected that China will continue to be Apple’s primary manufacturing hub in the foreseeable future. If Apple chooses to maintain its market share in a sustained tariff environment, it could put pressure on the company’s hardware margins. However, it is anticipated that Apple will counteract these pressures by continuing to expand its higher-margin services segment, which currently accounts for 25% of its revenue.

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