Apple Faces Italian Antitrust Fine Amid Growing AI Scrutiny

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Apple shares are trading approximately 5.5% below their record high from December 3, as the company navigates a significant regulatory penalty in Europe and increasing pressure from Wall Street over its perceived slow progress in artificial intelligence.

Italy's competition authority, the AGCM, has imposed a fine of €98.6 million (approximately $115.5 million) on Apple for alleged abuse of its dominant market position within the App Store. The investigation, which commenced in May 2023 and was coordinated with the European Commission and other international regulators, centers on the company's App Tracking Transparency (ATT) framework.

The AGCM contends that Apple enforced unilateral and disproportionate conditions through ATT, putting third-party developers at a competitive disadvantage. This penalty is the latest in a series of European regulatory challenges for the tech giant. Apple recently confirmed that its Apple Ads and Apple Maps services fall under the scope of the Digital Markets Act (DMA), which may impose additional "gatekeeper" obligations. This follows a separate €700 million DMA fine levied against both Apple and Meta in April 2025, with other EU proceedings still ongoing.

Wall Street's Impatience with Apple's AI Timeline

Concurrently, market analysts are expressing growing concern regarding Apple's strategy and pace in the AI sector. Dan Ives, an analyst at Wedbush Securities, issued a stark assessment, stating that 2026 must be the year Apple "finally leaves the horse and buggy and enters the AI race."

Reports indicate Apple is collaborating with Alphabet to integrate Google's Gemini AI into a revamped version of its Siri voice assistant. While initially slated for a mid-2025 release, the launch of the enhanced assistant is now expected in early 2026. Despite these delays, Morgan Stanley recently raised its price target for Apple to $315, citing stronger-than-anticipated iPhone demand.

Diverging Outlooks for the Coming Years

Analysts hold varying views on what will drive a sustained positive shift for Apple. Amit Daryanani of Evercore ISI suggests a meaningful iPhone upgrade cycle or demonstrable progress in AI integration are key to improving market sentiment.

In contrast, Gene Munster from Deepwater Asset Management anticipates that substantial new device categories featuring advanced AI capabilities are unlikely to reach the market before 2027 or 2028. This timeline highlights the broader debate among investors about when Apple's major AI initiatives will materially impact its product ecosystem and financial performance.