Apple faces 'headline risk' from regulators, not fundamental risk.
Apple (AAPL) faces regulatory pressures after reports of several investigations, from an antitrust lawsuit brought on by the US Department of Justice (DOJ) to the European Union's (EU) probe into Big Tech players.
Evercore ISI Analyst Amit Daryanani — who has an Outperform rating on the stock with a price target of $220 per share — joins Yahoo Finance Live to discuss how Apple could potentially recover and get unstuck from the rock-and a-hard place the iPhone maker finds itself in the middle of.
Daryanani notes that the EU probe poses "more headline risk than fundamental risk," stating that he doesn't believe it has "a material impact" on Apple. However, he suggests that how "elements in the US play out" will have a more substantial financial impact on Apple, as investors await the fallout from the DOJ investigation and the broader implications of Apple's AI partnership with Alphabet (GOOG, GOOGL).
Regarding Apple's stock underperformance, Daryanani attributes it to the fact that the company is not being perceived as "an AI story." He anticipates that at its upcoming WWDC 2024 conference, Apple will likely discuss the inclusion of Google's Gemini AI on iPhones and how AI can enhance the iPhone experience, which could serve as a good "value [proposition]" for the company's stock.
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