Tech giant Apple (NASDAQ:AAPL) could be in the eye of a regulatory storm. According to a New York Times report, the U.S. Justice Department is preparing to file an antitrust lawsuit against the company. AAPL stock has declined by more than 6% over the last five trading sessions.
This lawsuit could target the Cupertino giant’s devices and services, including how its Apple Watch works only with the iPhone or how its iMessage service is available only on Apple devices. The lawsuit could also target Apple Pay, the company’s payments system.
The lawsuit, if filed, could prove to be the “biggest antitrust risk for Apple in years.”
Apple investors are already worried about the different regulatory risks facing the company, particularly in Europe, regarding the control over its App Store. Other troubles for the company include a Justice Department trial examining Google’s (NASDAQ:GOOGL)(NASDAQ:GOOG) search deals, including the lucrative one with Apple.
AAPL’s iPhone Sales are Lagging in China
Meanwhile, in another sign of the company’s burgeoning woes, top-rated Jeffries analyst Andrew Uerkwitz has stated that channel checks indicate that iPhone sales fell by 30% in the first week of this year. The analyst added that, in comparison, other Android brands and Huawei had a relatively flat growth in sales year-over-year.
Uerkwitz pointed out that the tech giant’s iPhone sales declined despite heavy discounts on its different iPhone models through major Chinese online marketplaces like Pinduoduo (PDD). Citing an example, the analyst pointed out that Apple’s iPhone 15 Pro and iPhone 15 Pro Max were available at a 16% discount on the Pinduoduo platform in the first week of 2024.
The analyst believes that Apple’s market share has declined in its third-largest market due to rising competition from its Chinese rivals like Huawei. Uerkwitz has a Buy rating and a price target of $195 on the stock, implying an upside potential of 7.6% at current levels.
What is the Future Price of Apple Stock?
Overall, analysts remain cautiously optimistic about AAPL stock with a Moderate Buy consensus rating based on 22 Buys, eight Holds, and one Sell. The average AAPL price target of $202.50 implies an upside potential of 11.7% at current levels.
