Analysts pointed out that Apple has been under pressure recently, and investors may need to pay attention to other potential future challenges
The Zhitong Finance App learned that analysts pointed out that Apple (AAPL.US) has recently been under pressure, and investors may need to pay attention to other potential future challenges.
Compared with the S&P 500, which rose 6% this year, Apple's stock price has dropped 12%. The market is worried that the company will not be able to maintain its strong growth momentum, and analysts predict that Apple's sales for the March quarter will drop 4.3% compared to the same period last year. Furthermore, Apple has abandoned its decade-long efforts to build cars, and the latest data shows that iPhone shipments fell by nearly 10% in the first quarter.
Although Apple is viewed as a resilient stock, there are still significant regulatory risks ahead to watch out for.
The first is the final statement on the Google (GOOGL.US, GOOG.US) internet search monopoly case from May 1 to 3. The case involved estimated annual payments of around $18 billion, which Google paid Apple for the default settings of its search service on Apple devices.
Evercore analyst Amit Daryanani wrote on Tuesday: “The potential penalty with the biggest impact on Apple would be a judge prohibiting payment of the default search location arrangement.” He estimates that about $8 billion of Apple's net fiscal revenue is at risk.
The US Department of Justice also claimed in another lawsuit in March that Apple has violated antitrust laws and consolidated the iPhone's dominant position in the smartphone market through various strategies. However, Daryanani believes this challenge will have no substantial impact on Apple's revenue.
The government is likely to lose these two cases. It recently faced setbacks in the challenge of preventing Microsoft (MSFT.US) from acquiring Activision Blizzard and withdrawing UnitedHealth Group's acquisition of Change Healthcare. Despite this, the Google case is still a key risk that Apple investors need to be aware of.
Also, there is the issue of sales in the Chinese market. Needham's analyst Laura Martin adjusted her financial forecast for Apple on Tuesday due to a weak Chinese market and falling iPhone sales. She predicted Apple's second-fiscal quarter sales of $90.8 billion, down 4% from previous estimates. She also cut Apple's earnings per share forecast by 1% from the previous forecast to $1.51.
The market expects Apple to achieve a profit of 1.51 US dollars per share and sales of 90.7 billion US dollars in the quarter ending March. On Tuesday, Apple's stock price fell nearly 2% to $169.38. Meanwhile, the S&P 500 index fell 0.21%.