Apple Escalates Epic Games Fight With Appeal – Stock Falls After Price Target Cut

Apple (AAPL) has filed a notice of appeal with the Ninth Circuit in response to a federal court ruling last week that bars it from collecting commissions on transactions completed outside the App Store, escalating its legal battle with 'Fortnite' creator Epic Games.

The shares were down 2.5% in midday trade on Monday. 

U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple willfully violated a 2021 injunction to facilitate app developers' directing users to alternative, non-Apple payment options. 

The judge referred Apple to federal prosecutors for potential criminal contempt, stating that the company attempted to preserve a key revenue stream by circumventing the court’s original order.

In her ruling, Gonzalez Rogers criticized Apple for creating new obstacles — including a 27% fee for out-of-store purchases — and for deploying so-called “scare screens” that discouraged consumers from using third-party payment systems. “That it thought this court would tolerate such insubordination was a gross miscalculation,” she wrote.

Apple did not disclose its legal arguments in the appeal notice.

The ongoing legal challenges come as Apple faces broader financial pressures. Phillip Securities lowered its price target on the stock to $200 from $235 on Monday, maintaining a ‘Neutral’ rating per TheFly.

The brokerage cited reduced gross margin estimates tied to higher tariffs and expressed concern over continued softness in product demand, rising expenses, and persistent weakness in China after the tech giant's second-quarter (Q2) earnings last week.

Separately, Apple is reportedly considering changing its iPhone release schedule. According to a report by The Information, the company could begin staggering the rollout of its iPhone 18 lineup starting in 2026, departing from its traditional September launch schedule.

Apple’s stock is down nearly 20% year-to-date. On Friday, Microsoft (MSFT) overtook Apple as the world’s most valuable publicly traded company, with a market capitalization of $3.26 trillion versus Apple’s $2.99 trillion.

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