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Two Of America’s Biggest Companies Have Made A ‘Massive Bet’ On China: ‘They Can’t Just Abandon…’ Says Wedbush’s Dan Ives – Tesla (NASDAQ:TSLA)

Two Of America's Biggest Companies Have Made A 'Massive Bet' On China: 'They Can't Just Abandon…' Says Wedbush's Dan Ives - Tesla (NASDAQ:TSLA)

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Two of America’s biggest companies, which have made «massive» bets on China, Tesla Inc. TSLA and Apple Inc. AAPL, cannot abandon the country just because they’re undergoing a «white-knuckle» period, says top analyst Dan Ives.

What Happened: Tesla and Apple are both currently experiencing the impact of an economic slowdown in China and growing competition from local players like Warren Buffett-backed BYD Company Ltd. and Huawei Technologies.

«China is the heart and lungs of Tesla’s growth story. That’s 35% to 40% demand that’s [coming] from China,» Ives said in an interview with Hankyung Global Market.

While Tesla has seen a sliver of hope when it comes to sales of its vehicles made in China, Apple’s sales in the country fell 33% year-on-year in February.

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Apple, in particular, has been a victim of a larger geopolitical issue, according to Sarah Kunst, a former senior advisor at Bumble. She said Apple’s struggles in China are «less about Apple and more about a much bigger geopolitical kerfuffle.»

However, Wedbush analyst Ives thinks Tesla and Apple will have to go through this period and that they cannot just abandon China.

«They’ve made a massive bet in China, so they can’t just abandon. It’s very similar as Apple, and that’s why it’s been such a white-knuckle period.»

See Also: ‘Seeds’ For Apple’s Turnaround In China Are ‘Being Planted,’ Says Wedbush’s Dan Ives: ‘Some Patience Is Required To Navigate This Weakness’

Why It Matters: The Chinese market has sparked concerns about Tesla and Apple’s growth stories. While Tesla has increasingly competitive rivals to fend off, Apple has a multitude of challenges to fight, including competition from Huawei, geopolitical issues, and macroeconomic factors.

«Mad Money» host Jim Cramer thinks investors should «own it don’t trade it» as far as the Apple stock is concerned, but noted that «owning will hurt right now.»

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Deepwater Asset Management’s Gene Munster believes that Apple CEO Tim Cook’s latest visit to China is a sign that Cupertino could «double down» on Beijing.

Price Action: At the time of writing, Tesla’s shares were down 1.56% to $171.88, while Apple’s shares were up 1.72% at $178.05, according to Benzinga Pro.

Check out more of Benzinga’s Consumer Tech coverage by following this link.

Read Next: Wedbush’s Dan Ives Says Apple Has ‘Best Installed Base In The World’ For Its AI Future: WWDC A ‘Key Moment’ For Cupertino

Photos courtesy: Shutterstock and Flickr

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