Bank of America has hiked its Apple (AAPL) stock price target to $260, following an antitrust ruling on Tuesday that will allow Google to continue to pay the iPhone maker for preferred internet search engine positioning in Safari. The judge’s ruling has led to a positive response from investors and analysts
Apple earns approximately $20 billion a year from its current deal with Google, and the court could have banned them from entering into any such search engine deals.
In a note to investors on Wednesday, Bank of America said it is raising the price target for both Apple and Google. BoA’s price target for Apple rising to $260, up from the previous figure of $250.
The ruling from U.S. District Judge Amit Mehta takes a number of remedies off the table when it comes to Google’s search monopoly case. Google will continue to be allowed to make payments or offer “other consideration” to other companies for the preloading or placement of its Google Chrome, Gemini, or Search products. This includes Apple’s deal with Google which puts Google as the default search engine in Safari on the iPhone.
Google will also not be required to divest itself of its Chrome browser or its Android operating system. The judge commented that the government had “overreached in seeking the forced divestiture” of the assets.
Google will be required to share data with rival search engines.
Google is appealing the ruling.
Analyst Wamsi Mohan says the decision instills confidence in Apple’s Services business revenue, which includes the search deal. He also doesn’t see any real issue with the search deal in the future.
Apple’s share price has been on the rise since Tuesday’s ruling. After opening higher on Wednesday’s than Tuesday’s close, AAPL is hovering around $238 at the time of this article, up by 3.8%.
For Google, the stock price target is going from $217 to $230.66.
