Wall Street analyst reassures the market: Google's defeat has limited impact on Apple
Wall Street analysts believe that the news of the U.S. court ruling that Google illegally monopolized the search market will have limited short-term impact on Apple. Apple may be forced to set search engine options for its Safari browser and may potentially launch its own search engine. Analysts suggest that the ruling could be unfavorable for Apple, but is unlikely to have any significant impact at the moment
According to the Zhitong Finance APP, several Wall Street analysts believe that the recent court ruling that Google (GOOGL.US) illegally monopolized the search market is unlikely to have a significant impact on Apple (AAPL.US) in the short term.
Bernstein rates Apple as "outperforming the market" with a target price of $240.
Bernstein analyst Toni Sacconaghi stated that this ruling is unlikely to affect the approximately $20 billion annual payment Apple receives from Google, as the final resolution will take "several years."
Sacconaghi mentioned that Apple may be forced to set search engine options for its Safari web browser and could potentially achieve a usage rate similar to Google's current 36%. Additionally, Apple may eventually introduce its own search engine as an option, which could lead to growth for the company.
Bank of America reiterates a "buy" rating for Apple with a target price of $256.
Bank of America analyst Wamsi Mohan agrees with Sacconaghi's views, stating that Apple is unlikely to be immediately impacted, and the ultimate financial impact may be "limited" as any Google appeals could take a long time.
Citi reiterates a "buy" rating for Apple with a target price of $255.
Citi analyst Atif Malik mentioned that the ruling could be unfavorable for Apple, but since Judge Amit Mehta did not mention any remedies, it is unlikely to have any immediate impact.
Furthermore, Malik stated that Apple's efforts in artificial intelligence, improvements to Siri, and collaboration with OpenAI's ChatGPT "may to some extent steer consumers away from web searches."
Morgan Stanley rates Apple as "hold" with a target price of $273.
Morgan Stanley analyst Erik Woodring stated that if Apple's exclusive agreement with Google is rejected, Apple's earnings per share could decline by 4% to 6%; however, there is also an upside.
Woodring mentioned, "We believe Apple has been considering the negative impact of this Department of Justice ruling for a long time, so if Google's exclusivity terms are removed, Apple has already devised other profit avenues."
Woodring mentioned that these avenues include (but are not limited to): introducing search engine options in Safari, forcing global search providers to bid for favorable positions; renegotiating with Google and other search partners for better variable economics; building search capabilities internally within Apple Intelligence.
As of the time of writing, Apple's stock fell by 1.79% in early trading, to $205.52