Is Apple Too Expensive?

By Douglas A. McIntyre Updated Jun 17, 7:16AM EDT · Published Jun 15, 4:59AM EDT

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Is Apple Too Expensive? — © Apple Inc.. Paris (CC BY 2.0) by sabin paul croce

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Apple Inc.’s (NASDAQ: AAPL | AAPL Price Prediction) announcement of new AI features drove the stock to an all-time high.
The iPhone maker also faces antitrust lawsuits.

Two things happened this week. Apple Inc.’s (NASDAQ: AAPL) announcement of new AI features drove the stock to an all-time high. However, the EU is looking into whether Apple adheres to rules regarding whether it uses anti-competitive practices in its App Store. The EU would use its Digital Markets Act to evaluate and possibly punish Apple. According to the Financial Times, “If found to be breaking the DMA, Apple faces daily penalties for non-compliance of up to 5 per cent of its average daily worldwide turnover, which is currently just over $1bn.” Apple could still change some of its business practices to avoid a fine.

The EU is not the only place Apple can be investigated and punished. The Justice Department has also brought a suit, which claims Apple tried to increase its share of the smartphone market via monolithic actions. Similar suits could hit other large tech companies. For now, Apple is “first in line.” Apple still faces problems from rival Samsung.

U.S. government lawsuits are often underrated as risks to stockholders. They shouldn’t be. Over the years, the government has successfully filed suits against Microsoft Corp. (NASDAQ MSFT) and AT&T.

Apple’s stock run-up was because it will integrate powerful AI tools into its iOS operating system and its products, particularly the iPhone. Investors took this as a sign that Apple would not fall behind big tech rivals led by Alphabet Inc. (NASDAQ: GOOG) and Microsoft. Apple shares surged by almost 8% to an all-time high of $220.20. Several Wall Street analysts have even higher price targets. The next considerable test of Apple’s shares will be when it announces calendar second-quarter earnings and launches the iPhone 16.

The antitrust suits did not get much coverage as Apple talked about its AI features. Maybe they should have.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.