Apple Inc. (AAPL) and Epic Games have been involved in a heated legal battle for the last few years. The court case began in 2021, when U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple willfully violated a 2021 injunction to facilitate app developers’ directing users to alternative, non-Apple payment options. The outcome forced Apple to let developers inform users about payment methods outside its app store.
However, the case is still going, with Apple being accused of defying that court order. Last week, Apple (AAPL) filed a notice of appeal with the Ninth Circuit in response to a federal court ruling that bars it from collecting commissions on transactions completed outside the App Store. Apple stock hasn’t taken too much of a hit during the latest legal proceedings, however, some experts worry that it could if the battle goes in Epic Games’ favor.
The US stock market rebounded in a big way this week. Indeed, with geopolitical tension easing and trade deals imminent, there is a bullish sentiment beginning to arrive. Throughout the week so far, the S&P 500 gained so much that it was able to erase 2025 losses driven by an increasingly volatile year. That has greatly benefited some of the top tech stocks on Wall Street. However, it may not be enough to save one mega-cap company.
Outside of the growing legal battle with Epic Games, Apple is also dealing with a potential loss of $20 billion in revenue. In 2022, Alphabet paid Apple $20 billion to allow Google to be the default browser on all of its products. The payment is not subject to public information, but it stands as all revenue for the company. Specifically, those funds go straight toward Apple’s bottom line. That is likely why executives are so fearful that they could lose it.
Eddy Cue had recently testified in the ongoing Alphabet monopoly case. Subsequently, as you can imagine, the $20 billion came up. During the testimony, Cue noted that he believes AI-powered search will likely replace traditional Google-type engines. Therefore, the prospect of paying its part of the deal may not make sense for Alphabet anymore. If that payment from Alphabet no longer comes in, Apple could be in trouble, causing its stock to also fall.
Investors are mixed on how to approach Apple (AAPL) stock following the latest wave of news. While most often suggest that panic-selling isn’t the answer, projections for AAPL are being revised. While the stock is still arguably a buy, its price predictions have gone down, despite maintaining an outperform potential rating.