TD Cowen analyst Krish Sankar has reaffirmed a “Buy” rating and a $275 price target for Apple Inc. (AAPL), citing a favorable court ruling concerning Google’s search business.
According to the investment firm, a recent decision by the U.S. District Court for the District of Columbia positively impacts Apple’s advertising revenue. The ruling allows the continuation of Apple’s existing revenue-sharing agreement with Google, which includes substantial traffic acquisition cost (TAC) payments to keep Google as the default search engine in Safari.
Furthermore, the court’s non-exclusivity remedies grant Apple the flexibility to form partnerships with other generative AI providers, potentially including competitors to Google like OpenAI. This development could significantly expand Apple’s strategic options in the artificial intelligence sector.
The TD Cowen note also highlighted that the existing financial terms of the Google partnership serve as a valuable benchmark for pricing any future agreements with competing generative AI search services.
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