From Nasdaq: 2024-03-27 10:00:00

Apple (NASDAQ: AAPL) saw a 4.1% drop on March 21, the worst since August 2023, due to a civil antitrust lawsuit filed by the U.S. Department of Justice. The lawsuit accuses Apple of monopolizing smartphone markets. Despite ongoing challenges, Apple’s solid services segment contributed to strong financial results for its fiscal 2024 first quarter.

The DOJ’s lawsuit targets Apple’s high-growth services segment, which has been a key driver for the company amidst slowing product sales. Apple reported a 11.3% year-over-year growth in services revenue but just a 0.1% increase in products revenue for the quarter ended Dec. 30, 2023. The lawsuit highlights concerns about Apple’s fees and restrictions.

Apple depends on third-party developers to provide a range of services to its users, with services like Apple Pay facing criticism for high fees charged to banks. The lawsuit could lead to margin compression for Apple despite its strong financial performance. The company also faces challenges in global growth and foraying into new industries like mobile payments.

Despite challenges, Apple remains a solid investment option with a P/E ratio of 26.6, lower than the S&P 500’s multiple of 28.4. While short-term pressures may impact the stock, Apple’s strong fundamentals make it a good long-term investment. Investors should consider adding Apple to their watchlist or building a starter position in the stock.



Read more at Nasdaq: Apple Just Suffered Its Largest Single-Session Drop in Over 7 Months. Here’s What It Means for the Stock