The stock is rising after a critical ruling in a lawsuit between the U.S. Department of Justice and Alphabet (Google).
Shares of the large consumer tech company Apple (AAPL 2.83%) traded over 3% higher, as of 10:54 a.m. ET today. The move comes after a U.S. federal judge ruled that Alphabet, the parent company of Google, would not have to divest Chrome and could keep paying partners to feature its search engine on their web browsers.
Last year, U.S. District Judge Amit Mehta ruled in favor of the U.S. Department of Justice in a lawsuit against Google, saying that the search engine giant had indeed acted as an illegal monopoly with its digital advertising practices. But yesterday, Mehta stopped short of granting the DOJ's request to have Google divest Chrome.
Furthermore, Mehta ruled that Alphabet can keep paying partners to feature the Google search engine on their browsers, and this is why Apple stock is trading well today. Prior court filings revealed that Alphabet paid Apple $20 billion in 2022 to have Google as its default search engine on its web browser.
Apple stock struggled earlier this year, as investors worried that President Donald Trump's tariffs would significantly upend the iPhone maker, which has most of its supply chain abroad in countries like China, Vietnam, and India. But recently, Apple managed to get an exemption from several of the tariffs by promising to invest hundreds of billions in the U.S. Now, the ruling on the Google lawsuit is another big win.
Apple will still face higher costs from tariffs but they are no longer as big of a concern. While the stock is now in a better position, many investors are still concerned about the company's broader artificial intelligence strategy. I think investors can buy the stock, but there are still issues to work through that investors should continue to monitor.