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Apple shares plunged on Monday after European regulators slapped Apple with a hefty antitrust fine over music streaming. This latest setback begs the question: How can Apple get back on track? The European Commission has fined Apple $1.95 billion for violating competition laws in the music streaming market. This is one of the largest fines ever imposed on a technology company by the European Union’s enforcement arm. Apple has blocked rival streaming developers from informing iOS users about cheaper music subscriptions outside the App Store, European regulators have claimed. Apple plans to appeal the fine and said in a fiery response that European-based Spotify was the “main champion” and “largest beneficiary of this decision.” Apple and Spotify have rival audio streaming services. “Spotify has the world’s largest music streaming app and has met with the European Commission more than 65 times during this investigation,” the American iPhone maker said in a statement. “Spotify has a 56% share of the European music streaming market, more than double that of its closest competitor, but Apple remains unpopular with Apple for its services that have helped make it one of the most recognizable brands in the world. We’re not paying anything to Apple.” Jim Cramer said Monday that European regulators view Apple and other U.S. companies as cash cows. “Every six months, they ask our big tech companies for a check,” he added. AAPL YTD Mountain Apple (AAPL) Year-to-date Performance Apple’s stock price fell 2.5% on Monday as the European Commission’s impressive announcement added to the company’s recent series of woes. So far this year, stocks are down 9%, compared to a year-to-date gain of 7.5% for the S&P 500. Apple is also the worst performing company of the Super Six this year. Even Alphabet, which is battling its own setbacks, is down about 4.5% year-to-date. The remaining companies (Amazon, MetaPlatform, Microsoft, and NVIDIA) rose significantly in 2024, led by NVIDIA’s 75% jump and Meta’s 41% jump. One of the biggest reasons for Apple’s struggles in 2024 is slowing iPhone sales in China as domestic smartphone competitors such as Huawei offer cheaper alternatives. Major third-party retailers in China are even offering deep discounts on the iPhone 15 in hopes of stimulating demand for the latest version of Apple’s flagship device. With many analysts expressing caution at the beginning of the year, it is no wonder that investor sentiment has weakened. Therefore, members may wonder. How do these obstacles affect our “own it, don’t trade it” theory of Apple stock? The answer is, no. Jim also left a message for his Apple sellers on Monday. “If you want to sell now, be my customer,” he said. Jim has always been willing to admit that Apple can sometimes fall into trading turmoil, but he insists that in the long run, its excellence will prevail. Yes, China has become a big risk for his Apple. This is the company’s second largest market, accounting for nearly 20% of its revenue. However, management is adapting to the uncertain operating environment by expanding manufacturing and retail operations into emerging countries such as India. Club analysts say this is a smart move to capture smartphone share in an untapped market. Additionally, Apple’s growing services business (consisting of revenue from the App Store, iCloud, Apple Music, and other services) continues to play a key role in driving the company’s bottom line. Apple has a very loyal customer base thanks to the quality of its devices, which results in more and more people joining its ecosystem of high-margin services. The big question mark for Apple is around artificial intelligence. Until last week, the company had been fairly quiet about incorporating AI into its products and services. But the company made its commitment to the technology clearer to investors by abandoning its decade-old electric vehicle ambitions and putting those resources into AI. Last Wednesday, a day after news of the transition, Apple CEO Tim Cook said Apple “believes generative AI has incredible breakthrough potential, which is why we’re currently investing in this area.” “We’re making a huge investment.” He added, “We look forward to sharing with you later this year how we’re breaking new ground in generative AI.” This led to speculation that more announcements could be made at Apple’s annual developer conference in June. Melius Research said an AI-integrated iPhone would have a phenomenal effect on sales and Apple’s stock price. “New AI services will force users to upgrade their iPhones, driving the 2025 supercycle,” analysts said in a note to clients on Monday. “New phones will be needed as advances in silicon, software, and security are optimized for generative AI applications.” Melius also sees benefits for his Apple services with software features that incorporate AI. Masu. Analysts argued that it is historically unwise to sell shares in big tech companies ahead of anticipated AI efforts, citing the benefits of portfolio name Microsoft. Melius said investors need to take a deep breath and look at the big picture when it comes to Apple, which has more than 2.2 billion devices actively installed. Jim described Melius’ commentary as “really smart” as the club remains open to innovative updates for the next version of the iPhone. Jim also believes a lot in Apple’s new Vision Pro mixed reality headset as a long-term catalyst. Apple also announced Monday that its latest M3 chip will be integrated into new MacBook Air models, which it described as “the world’s best consumer laptop for AI.” The news further reassures the club that Apple is working on AI as other computer manufacturers update their products. (Jim Cramer’s charitable trusts are AAPL, META, AMZN, GOOGL, MSFT, NVDA. See here for a complete list of stocks.) Jim Cramer’s of his CNBC Investment Club As a subscriber, you will receive deal alerts before the gym. he makes a deal. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about his stocks on his CNBC TV, he will issue a trade alert and then he will wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
The Apple logo appears on the Nasdaq Market site on Thursday, August 25, 2011, just before the opening bell in New York.
Scott Eales | Bloomberg | Getty Images
apple Stocks tumbled on Monday after European regulators slapped the tech giant with a huge antitrust fine over music streaming. This latest setback begs the question: How can Apple get back on track?
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