Apple Inc. (AAPL) is expected to take a $10 billion loss should it lose the outcome of an ongoing legal battle with Alphabet (GOOGL). According to Bank of America analysts, Apple may lose as much as $10B along with annual payments from Google if it is not required to pay Apple anything related to search.

“In our opinion, if Google is mandated not to pay Apple for anything related to search, then Apple could potentially lose half of the $20bn+ annual payment from Google,” BofA analyst Wamsi Mohan wrote in a Monday investors’ note. “This amount is accounted for as part of Apple Services revenue (as Google TAC) and has a high drop-through to the bottom line (it’s a pure royalty type payment).” The analyst went on to reiterate a Buy rating on the stock with a $240.00 price target. At press time, Apple (AAPL) shares are trading at $202, down 3% in the last five days.

Bank Of America Gives Apple Stock Ruling

Furthermore, the Bank of America analyst remains optimistic about its long-term growth driven by AI investments and solid financials. Despite a recent Apple stock decline, the fundamentals suggest a potential for recovery in AAPL. Mohan went on to add that the Apple/Google lawsuit ruling would only apply to the US, and that Apple should be able to receive payment for search traffic sent to Google outside the US. Should this be the case, investors may have a lifeline for AAPL stock.

Also Read: Apple Stock Jumps After $94B Q3 Earnings & iPhone Sales Surge

The iPhone developers posted a solid Q3 earnings report that sent shares higher, but those gains can be reversed following a negative ruling in the lawsuit. Apple’s earnings of $1.57 per share exceeded analyst estimates of $1.43, and revenue hit $94.04 billion versus the expected $89.30 billion. Additionally, Apple’s stock price gained momentum from iPhone sales growth of 13.5% to $44.58 billion, which beat forecasts by over $4 billion, even with ongoing tariff concerns.

Therefore, analysts remain optimistic about Apple’s long-term growth, citing its solid financials and a potential upside of around 15%.