Why you should care if you have Apple stock
The recent move by the Department of Justice (DOJ) against the Apple company, regarding the antitrust lawsuit, jeopardizes the commercial advantage identified in the strong attachment of customers to the Apple ecosystem and shifts the market's attention to the sustainability of price growth of Apple shares.
Will the company, the subject of numerous recent news, be able to keep the value of its shares high, given the recent war started by the DOJ? The antitrust lawsuit against Apple The Department of Justice has filed a lawsuit against Apple, accusing it of violating antitrust laws through practices aimed at keeping customers loyal to its Apple products, thus reducing the propensity of consumers to switch to competing devices.
The lawsuit directly targets the iPhone.
Apple responded by stating that these practices are intended to make iPhones more secure than competing smartphones, underscoring the importance of such measures to creating the technology that consumers love.
At the moment, the situation is unclear and the precise implications of this event remain uncertain, although Apple has announced its intention to file a motion to dismiss the case in the next 60 days.
Why doesn't this play in favor of the APPL stock price? The legal action aims to undermine one of the main points in favor of Apple's corporate structure, as well as the main reason why it remains the largest company in the United States: its ability to keep the customer in its ecosystem.
In summary, the antitrust move jeopardizes the low "churn rate" of customers.
The target prices on the shares have not yet been revisited by any investment bank, also because it is a recent development, and the impact that this lawsuit could have on Apple's fundamentals depends a lot on how the issue evolves in the future.
AAPL shares, what to expect? Apple's P/E is around 27, and this valuation presents an undoubted premium in the price, which partly discounts the company's current ability to retain users.
The antitrust move could call into question the size of the award, especially when considering the stock price in the short term, given the novelty surrounding the ongoing lawsuit.
In the long run, the issue could look different, making these declines real opportunities.
This happens when we exclude the ongoing lawsuit and look at the innovations declared in the most recent conferences, such as the application of generative artificial intelligence tools in the new Apple devices, which vice versa, would lead to an increase in the company's earnings expectations, maintaining the premium on the AAPL share price almost stable, as is the pace of profit growth.