Jefferies warns: Antitrust cases may cause Apple (AAPL.US) to lose one-third of Google's revenue

Zhitongcaijing · 10/17 03:33

The Zhitong Finance App learned that the deal between Google (GOOG.US, GOOGL.US) and smartphone manufacturers such as Apple (AAPL.US) is the core of the US Department of Justice's antitrust lawsuit against this search giant. Investment firm Jefferies said that if the US Department of Justice finally wins after a series of appeals, Apple may lose a large amount of revenue.

Jefferies analyst Edison Lee said, “Our US Internet team's antitrust experts believe it may take 3 to 8 years to reach a settlement. We expect if Apple loses 1/3 of its revenue from Google in fiscal year 2028 (US only), our discounted cash flow (DCF) will drop by about 8%.”

Lee said that this decline will only occur in the US, and assumes that the revenue sharing agreement between Apple and Google or other search engine companies does not offset anything. This is the most pessimistic result. However, he warned that if the US Department of Justice wins the case, other countries may notice this. The analyst gave Apple a “holding” rating.

Lee added that despite this unresolved issue, iPhone 16 sales and the launch of Apple Intelligence are seen as more important factors in the short term, considering that iPhones account for about half of Apple's annual revenue.

By Wednesday's close, Apple was down 0.89% to $231.78. The stock is up 21% cumulatively since this year.