Key Points
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Apple (NASDAQ: AAPL) may face significant revenue loss due to a potential legal ruling linked to Google’s antitrust case, set to be finalized this month.
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If the ruling ends Apple’s search exclusivity deal with Google, the company could see a drop in earnings by $9.5 billion, approximately 12% of its annual profits.
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Google currently pays Apple around $28 billion per year for search traffic from Apple devices, which may not be factored into Apple’s current valuation.
Apple shares have been rising recently, largely attributed to investor relief over tariff concerns. However, the impending final ruling in the United States v. Google LLC (2020) case could jeopardize a key revenue source for Apple. Judge Amit Mehta is expected to deliver the ruling this month, which may include a ban on Google’s search exclusivity deal with Apple, potentially leading to significant financial ramifications for the tech giant.
Analysts estimate that losing the search revenue from Google could reduce Apple’s earnings substantially. Google pays approximately $28 billion annually to Apple for search traffic, with $12.5 billion coming from U.S. users. If the exclusivity ends, J.P. Morgan estimates that Apple’s earnings could drop by $9.5 billion, highlighting a looming volatility risk for its stock.
