With the Department of Justice (DoJ) in the United States once again taking aim at Google (NASDAQ:GOOG), there might be one somewhat less-expected loser in any negative verdict for Google: Apple (NASDAQ:AAPL). The word came out of Bernstein via analyst Toni Sacconaghi, who noted, “A negative ruling for Google would likely be a downside catalyst for Apple.” Why? Simple; the deal between Apple and Google—referred to as the Information Services Agreement—represents a hefty chunk of Apple’s bottom line.
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In fact, Sacconaghi also highlighted that the deal is worth somewhere between $18 billion and $20 billion a year. Worse, for Apple, it represents a whopping 14% to 16% of its total operating profits. Losing that agreement—which it might, if the DoJ calls for it—would be a serious blow.
Meanwhile, Apple actually had an opportunity to go a different route previously. Recent testimony in the Google case from the founder of the DuckDuckGo search engine, Gabriel Weinberg, revealed that DuckDuckGo had been in talks with Apple about a potential contract to become Apple’s default search engine. However, Google—and its massive multi-billion dollar paydays—were just too much for Apple to pass up.
Is Apple Stock a Good Buy Right Now?
Meanwhile, Apple still enjoys plenty of analyst support. With 20 Buy ratings and nine Holds, Apple stock rates as a Moderate Buy by analyst consensus. Meanwhile, Apple stock also offers 16.16% upside potential thanks to its average price target of $207.69.