Evercore ISI reiterated its Outperform rating and $250 price target on Apple (AAPL, Financials) on Thursday, pointing to the company's efforts to diversify its supply chain amid rising U.S.-China trade tensions.

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Apple, with a market value of about $2.92 trillion and gross margins of 46.5%, remains a heavyweight in the technology sector. Still, looming trade risks are back in focus. The Section 232 investigation into Chinese electronics could bring new tariffs, threatening to raise costs for Apple products.

To manage the risk, Apple has shifted some iPhone production to India and moved Wearables and Mac production to Vietnam. Analysts estimate India could handle up to 35% of iPhone and iPad production, with Vietnam covering about half of Apple's Wearables and Mac output.

Evercore ISI warned that a 20% tariff on Chinese goods could inflate Apple's cost of goods sold by $6 billion to $8 billion, potentially shaving about $0.40 off earnings per share. Still, the firm expects Apple to manage the impact by sharing costs with suppliers, raising some prices, and expanding Indian manufacturing.

Relocating production to the United States remains unlikely given labor costs that could push manufacturing expenses up by more than 50%, Evercore ISI said.

Recent shipments highlight the shift underway: Foxconn and Tata sent nearly $2 billion worth of iPhones from India to the United States in March, setting a record. Meanwhile, UBS kept a Neutral rating on Apple with a $236 target, suggesting recent tariff adjustments could ease some of the financial pressure.