J.P. Morgan (JPM) is reportedly in advanced talks to take over Apple’s (AAPL) credit card program. According to the Wall Street Journal, talks between the two companies have picked up in recent months. Apple has been in discussions with J.P. Morgan since early last year and has reportedly told the bank that it is the top choice to replace Goldman Sachs (GS) as its Apple Card partner.
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Goldman Out, JPMorgan In?
According to sources familiar with the matter, talks between J.P. Morgan and Apple have advanced, while other potential partners like American Express (AXP), Synchrony (SYF), and Barclays (BARC) are no longer in the running.
For J.P. Morgan, the Apple Card deal would further strengthen the bank’s standing as a top player in U.S. finance. Meanwhile, for Goldman, shedding the Apple Card business would mark the end of a challenging period for CEO David Solomon. Goldman had originally committed to managing the card through at least 2029.
For context, Goldman Sachs entered the credit card space in 2019 after winning the Apple Card deal over competitors. However, the rapid growth of the Apple Card, combined with accounting rules that required Goldman to set aside upfront reserves for potential future losses, left the bank unprepared. This was mainly due to certain one-sided elements of the Apple deal, particularly customer service responsibilities, which made the partnership much more expensive for Goldman than expected. The partnership also raised questions about compliance and customer service standards under Goldman’s management.
What This Means for Apple
On the other hand, partnering with J.P. Morgan would offer more stability to Apple after years of rapid growth and regulatory scrutiny tied to Goldman’s handling of billing and refunds. J.P. Morgan is viewed as more cautious than Goldman and is expected to agree to the deal only if certain conditions, such as changes in how the Apple Card is managed, are met.
Is Apple Stock a Buy Right Now?
Turning to Wall Street, AAPL stock has a Moderate Buy consensus rating on TipRanks based on 13 Buys, 12 Holds, and one Sell assigned in the last three months. The average Apple share price target of $228.11 implies an 8% upside potential.
