Apple (AAPL, Financials) shares climbed about 2% to close at $202.52 on Monday after KeyBanc upgraded the stock, citing the company's exemption from a new round of U.S. tariffs on tech imports.

The firm raised its rating on Apple to “sector weight” from “underweight” following the Trump administration's decision to exclude smartphones, computers, and other electronics from the latest “reciprocal” tariffs. KeyBanc analyst Brandon Nispel said in a note that the decision significantly reduces the downside risk from a prolonged trade conflict between the United States and China.

Citi maintained its “outperform” rating on Apple but lowered its sales projections for iPhones, Macs, and wearables. The bank cited expectations of a global economic slowdown due to the broader impact of tariffs, even as Apple's core products received exemptions. According to Citi, Apple remains vulnerable to weakening macroeconomic conditions.

Commerce Secretary Howard Lutnick said Sunday that the tariff exemption is not permanent and that the administration could introduce new tariffs within the next two months. That raises questions about how long the trade relief will benefit Apple and other tech companies.

Wedbush, which also has an “outperform” rating on the stock, said the temporary nature of the exemption creates space for potential negotiations between the United States and China. The firm noted that Apple and other major tech companies are closely watching for any developments that could renew trade tensions.

Despite the recent gains, Apple shares are down nearly 20% since the start of the year.