Major Wall Street investment banks such as Goldman Sachs and Bank of America reiterated optimistic views on Apple Inc. (NASDAQ: AAPL) despite the legal headwinds stemming from the recent Department of Justice (DoJ) lawsuit.
The DoJ argues that Apple is monopolistic in the smartphone market.
The Cupertino, California-based iPhone maker is accused of stifling innovation that could threaten its dominance in the space.
"Customers often choose Apple products - despite several alternatives existing - because of the perceived quality of the products and experience rather than a lack of choice of alternative products," Bank of America analyst Wamsi Mohan wrote in a note.
According to Bank of America, gauging the revenue and earnings implications for Apple is challenging.
Yet, Apple has affirmed its intention to counter the claims and Mohan reiterates a 'Buy' recommendation, driven by a multi-year phone upgrade cycle propelled by Generation AI and sustained momentum from the shift towards services.
The investment bank keeps a 12-month $225 per share price target for Apple, implying a 33% surge from current levels.
Bank of America supported Apple's right to limit access to rival apps that could jeopardize its competitive edge, imposing a fee on developers for platform use, and giving preference to its own products.
Despite the legal challenges, Goldman Sachs maintains a 'Strong Buy' rating on Apple Inc. with a 12-month target price of $232, translating to a potential 35% upside from current levels.
Goldman Sachs analyst Michael Ng, CFA, underscored Apple's continued delivery of premium services and experiences, contributing to an "unmatched brand strength and loyalty."