Apple (AAPL) stock is modestly lower Tuesday after the European Court of Justices ruled that the tech giant must pay 13 billion euros (about $14.4 billion) in back taxes to Ireland.
The ruling stems from a 2014 investigation by the European Commission into Apple's tax payments in Ireland, according to CNBC. This led to a 2016 ruling that Apple received "illegal" tax benefits from Ireland over the course of two decades. After a series of appeals, the ruling was confirmed, which ordered Ireland to recover the back taxes.
"This case has never been about how much tax we pay, but which government we are required to pay it to," an Apple spokesperson told CNBC. "We always pay all the taxes we owe wherever we operate and there has never been a special deal. The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the U.S."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In a filing with the Securities and Exchange Commission (SEC), Apple said it expects to record a one-time income tax charge of up to approximately $10 billion in the fourth quarter of its current fiscal year as a result of the ruling.
Is Apple stock a buy, sell or hold?
Apple stock has slightly lagged the broad market so far this year, up 15.2% on a total return basis (price change plus dividends) vs the S&P 500's 15.8% gain. But Wall Street remains bullish on the Dow Jones stock and isn't too concerned about the company's big tax bill.
Indeed, according to S&P Global Market Intelligence, the average analyst target price for AAPL stock remains at $237.99, representing implied upside of over 9% from current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Wedbush is one of the most bullish outfits on the large-cap stock, which reiterated its Buy rating and $300 price target on Apple after Monday's iPhone 16 reveal.
"Today in Cupertino, Apple launched iPhone 16, which we believe will be the most successful iPhone unit launch in its history, as Apple Intelligence will be the launching pad for the consumer AI Revolution globally," says Wedbush analyst Daniel Ives said in a note yesterday following Apple's September launch event.
Ives adds that the "new era of personalization and how consumers interact with their iPhones has now begun," and he believes this will spark "a renaissance of iPhone growth (high-single-digit growth upside) for Apple over the next 12 to 18 months and drive shares higher with a $4 trillion market cap in 2025." AAPL's current market cap is closer to $3.33 trillion.
Related Content
-
How Location Changes the Math on Owning a Vacation HomeThe market you choose can make your dream getaway a smart investment — or an expensive mistake.
-
You're High-Net-Worth: Should Your Retirement Savings Be in a Swiss Bank?Swiss banks have long been a haven for the wealthy. Here's how to safeguard your retirement account in a Swiss bank — and whether you should.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible HeirA spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
-
Adapting to AI's Evolving Landscape: A Survival Guide for BusinessesLike it or not, AI is here to stay, and opting out could be disastrous for your organization. Instead, focus on what you can control and be flexible, as AI is still evolving.
-
S&P, Nasdaq Hit New Highs: Stock Market TodayA late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
AMD Stock Surges on OpenAI DealAdvanced Micro Devices could see tens of billions of dollars in new revenue from the ChatGPT maker as the AI infrastructure buildout accelerates.
-
These Stocks Dipped in 2025. Do They Have Value?If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy InvestingInvesting in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's ExecutivesFeeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
Stock Market Winners and Losers of the 'Big, Beautiful' BillDefense, manufacturing and tech should prosper, while health care and green energy stocks face hurdles.
