Apple Inc’s Huge Plans Could Redefine Tech Stock Market

Apple Inc Gets Bold

Listen, I know Apple Inc (NASDAQ:AAPL) isn’t an under-the-radar stock; AAPL stock has been among the most celebrated stocks for decades now. Apple stock, in fact, is widely considered one of the top tech stock market powerhouses of the last 40 or so years.

But as with all things that achieve great results regularly, you begin to take the greatness for granted. And investors who are looking to profit from the tech stock market in 2020 and 2021 ought to pay close attention to AAPL stock.

First, let’s take a look at Apple stock’s performance in 2020 so far.

Chart courtesy of StockCharts.com

As seen in the above chart, AAPL stock has been enjoying a great year. Not as great, mind you, as some tech stocks, but 50% growth from a blue-chip tech stock in a pandemic year is not too shabby.

To be fair, the COVID-19 pandemic has actually proven to be a boon for tech stocks as the world adapts to the “new normal” (words I’m tired of hearing and writing).

This brave new world we’re in is one where technology (already dominant in the modern economy) has seized upon the current conditions to become, in certain instances, life-or-death necessities.

Imagine if offices were still open across the U.S. You think the COVID-19 case numbers are bad now; water cooler discussions would be catastrophic.

That has opened the door for tech stocks of all stripes to profit from the situation, with Apple stock being no exception.

But Apple Inc has something even bigger up its sleeve; it has eyes on the search-engine business.

This plan comes as the U.S. Department of Justice (DOJ) ramps up its antitrust case against Alphabet Inc (NASDAQ:GOOG), otherwise known as Google, claiming that the search engine represents a monopoly.

“Google is a monopoly under traditional antitrust principles and must be stopped,” said Ryan Shores, associate deputy attorney general. “We are asking the court to break Google’s grip on search.” (Source: “The DOJ Just Slammed Google With a Landmark Antitrust Case, Kicking Off the Largest Legal Challenge in the Tech Giant’s History,” Business Insider, October 20, 2020.)

In the early 2000s, Microsoft Corporation (NASDAQ:MSFT) faced something similar, an antitrust lawsuit that nearly led to the company being forced to break up (it later came to a settlement that prevented a breakup).

There’s definitely a risk that Google would suffer severe consequences if the company loses its case. One such consequence would be the dissolution of its partnership with Apple.

Right now, every “iPhone” (one of the most popular smartphones in the world) has “Google Search” loaded as the default search engine on Apple’s “Safari” web browser. It’s been that way for 10 years, and Google pays Apple up to $12.0 billion a year for the privilege.

This partnership is exactly the type of thing the DOJ has issue with: Google leveraging its power and resources to put its search engine on as many screens as it can.

The DOJ lawsuit says Google doesn’t want to lose its Apple deal, calling that a “code red” scenario. The DOJ says the Apple deal brings in around half of Google’s U.S. site traffic—and as much as 20% of Apple’s worldwide net income. (Source: Ibid.)

Suffice to say, the lawsuit is a very big deal that could reshape the tech stock market landscape.

Apple, in anticipation of a potential court ruling forcing it to break its deal with Google, is looking to create its own search engine. As such, we could soon be living in a world where Google isn’t the go-to search engine.

In fact, there’s a good chance that Apple Inc could eat away at a huge portion of Google’s market.

Apple would automatically have millions of people using its search engine by default on their iPhones. That would create an instant customer base.

And considering that Apple Inc is known for producing products that, whether justified or not, tend to impress users as being a cut above the competition, this could feasibly create a huge market for the company to exploit.

If it ends up being a strong search engine, Apple could easily leverage its iPhone and “Mac” users to get dozens of millions of people using its search engine, and from there it could even spill over to “Windows” users.

Which is just a long way of saying that this is a big deal. A huge deal, potentially.

Currently, Google has a market cap of more than a trillion dollars. Apple could end up taking a bite out of that, depending on how the court rules and how effective Apple is at creating its own search engine.

Apple Inc already employs one former Google higher-up, John Giannandrea, who was Google’s head of search, to work on its artificial intelligence (AI) services.

AAPL Stock Selling Low

The cherry on top: now is a great time to consider Apple stock.

Despite AAPL stock seeing huge gains in 2020, its recent run has been less than ideal.

Chart courtesy of StockCharts.com

Apple stock has been coming off a huge surge following its stock split, which created a fervor for a time.

But with that luster fading, coupled with a somewhat disappointing fourth-quarter earnings report, AAPL stock is poised for a rebound.

Despite the company’s recent troubles (small ones that they are), it’s still looking very strong moving forward.

Forget, for a second, the what-ifs surrounding the antitrust lawsuit. Consider just the fact that the “iPhone 12” is rolling out with 5G compatibility. As 5G gains in popularity, many people will flock to the new iPhone model.

Moreover, hyper-fast download speeds are more in demand than ever as pretty much everyone and their auntie is working from home now.

All this is to say that Apple stock is in a dip right now, and buying on the dip is one of the best ways to make a significant profit in the stock market.

Analyst Take

AAPL stock is looking poised to dominate the tech stock market in 2021.

With Apple Inc’s iPhone 12 rolling out with 5G capability, and the company’s potential entry into the search-engine business, there’s a lot to like about Apple stock.