5 analysts discuss the outlook for Apple stock in light of the DoJ lawsuit

investing.com:

Apple (NASDAQ:AAPL) stock closed 4% lower at $171.3 after the Department of Justice (DOJ) unveiled its long-anticipated lawsuit against the iPhone maker for violating antitrust regulations. AAPL remains one of the Magnificent Seven laggards in 2024, losing 11% year-to-date, while the broader S&P 500 gained roughly 10% during that period.

On Thursday, the Department of Justice filed a lawsuit against Apple, accusing the company of monopolizing the iPhone ecosystem, which has significantly contributed to its “astronomical valuation” at the cost of consumers, developers, and competing phone manufacturers.

The suit sent Apple stock lower on Thursday.

A Justice Department official mentioned during a briefing call that if the U.S. government prevails, they are considering structural relief which could include breaking up the company.

The lawsuit alleges that Apple's anti-competitive behavior is not limited to its iPhone and Apple Watch lines but also affects its advertising, browser, FaceTime, and news services.

“Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” the DOJ said in its lawsuit, which also involves 16 attorneys general in New Jersey federal court.

If successful, breaking up Apple would mark a rare application of the Sherman Act, not seen since the Bell System's dissolution in 1982.

The DOJ accuses Apple of maintaining its iPhone sales by hindering cross-platform messaging apps, restricting compatibility with third-party wallets and smartwatches, and obstructing non-App Store programs and cloud streaming services.

This lawsuit poses a significant threat to Apple's closely guarded ecosystem. The company argues that regulatory compliance is costly, could limit its