Apple assessment (AAPL) after epic antitrust decision

Apple Inc.’s App Store (AAPL) endures, albeit with different payment options, and Apple is not a monopoly. These are the main lessons from U.S. District Judge Yvonne Gonzalez Rogers’ ruling in the antitrust lawsuit brought by Fortnite maker Epic Games, which appeals.

The lawsuit began after Apple removed Fortnite from the App Store. This happened after Epic inserted a link to its own payment system in Fortnite, violating its development agreement. Epic has deliberately bypassed Apple’s in-app payment system, which cuts all in-app transactions on iOS devices like iPhones by around 15% to 30%. This generates billions in revenue every year.

Judge Rogers sided with Epic in the payment system complaint, but other important decisions in the case have been in favor of Apple. Its definition of the market in the matter as digital mobile game transactions, rather than the entire iOS ecosystem as Epic hoped, appears to have laid the groundwork for a “non-monopoly” decision (but I am not a legal expert!). Still, she said Apple is close to monopoly power in this market.

As a result, future changes to the App Store may be required. Legislative interest can also force changes. So how does this potentially affect Apple’s stock?

While an antitrust case is serious, and it certainly seems like a big deal, it may not be too much of an issue for the overall performance of the stock. Keep in mind that according to my estimates in the “Legislative Interest” link above, App Store revenue can be around 5% of total revenue.

Of course, he could grow up. But as it stands, the impact of this decision on overall revenue and growth is expected to be minimal, especially over time. Big investors know this.

I watch when I think institutional investors are trading stocks. I call them Big Money signals. I don’t think these market players are too worried about the recent long-term decision. To get a real idea of ​​what Big Money really thinks about Apple, let’s broaden our horizons.

Below is a chart for Apple going back to 2017. I have noted the times when Big Money invested in stocks. The way I see it, the more big money the better.

The activity in the graph above shows how much money, over time, likes Apple stocks. Given the fundamentals, demonstrated growth and future potential, it’s hard to disagree. Of course, the stock has seen tough times. But zoom out, and it’s clear that this stock had to be somewhere – UP.

Now, the antitrust lawsuit is obviously important. But even if the App Store were marginalized by other options on iOS devices, the potential impact on overall revenue is highly likely to be small.

And who knows? The company could transform this situation in a positive way, perhaps creating a new profitable payment method or something entirely unique. Also, don’t overlook the possibility that Apple will eventually win through market forces.

The bottom line

Apple received a mixed verdict in its recent antitrust case (the App Store payment system may be in trouble, but the judge doesn’t see the company as a monopoly). But even in the worst case scenario, there is likely to be only a minimal effect on the entire business.

From my perspective, Big Money feels it and focuses more on long term fundamentals and growth potential. What you say?

Disclosure: The author does not hold any positions in AAPL at the time of publication.