The U.S. Department of Justice's antitrust lawsuit against Google (GOOG, GOOGL) centers on its deals with smartphone manufacturers like Apple (AAPL, Financial). Investment firm Jefferies suggests that if the DOJ succeeds after appeals, Apple could face significant revenue losses.
Jefferies analyst Edison Lee noted that a settlement might take 3 to 8 years to finalize. If Apple loses one-third of its U.S.-based revenue from Google by fiscal year 2028, its discounted cash flow (DCF) could decrease by about 8%. This estimate assumes no revenue-sharing offsets with Google or other search engine companies, highlighting the worst-case scenario. However, if the DOJ wins, other countries may follow suit, Lee warns. Despite this, Lee maintains a "hold" rating on Apple.
In the short term, Apple's revenue is expected to be driven more by iPhone sales, which account for about half of its annual revenue, as well as the launch of Apple Intelligence. As of the latest closing, Apple's stock fell by 0.89% to $231.78 but has risen by 21% year-to-date.
