Citi analyst Atif Malik maintained a Buy rating on Apple (AAPL – Research Report) yesterday and set a price target of $240.00.
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Atif Malik has given his Buy rating due to a combination of factors that reflect Apple’s strategic positioning and potential for future growth. One of the key reasons is Apple’s proactive approach to diversifying its search engine partnerships, which is evident from its discussions with multiple AI providers to integrate AI search features into Safari. This move is seen as a way to reduce Apple’s dependency on Google Search, which currently contributes significantly to Apple’s revenue through Traffic Acquisition Costs (TAC).
Furthermore, Malik’s analysis considers the potential financial impact on Apple if it loses some or all of the TAC revenue from Google. Despite this risk, the integration of AI search providers could present new revenue-sharing opportunities that might offset any losses. Malik’s evaluation suggests that even in a scenario where TAC revenue is significantly reduced, Apple’s earnings per share would still be resilient, supporting the Buy recommendation.
In another report released on May 6, Morgan Stanley also maintained a Buy rating on the stock with a $235.00 price target.