Apple Faces Major Patent Verdict Amid Strong Financial Performance

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A California jury has ordered Apple to pay medical technology firm Masimo $634 million in damages, marking one of the largest awards in a patent infringement case of this kind. The ruling, delivered in November 2025, found that blood-oxygen monitoring features in approximately 43 million Apple Watch units sold between 2020 and 2022 violated Masimo's intellectual property. The specific functions cited were the fitness tracking mode and heart rate notifications.

Apple has immediately announced plans to appeal the decision. The tech giant contends that the patent in question expired in 2022. Despite this legal challenge, the company has already implemented a redesign for its watches, processing blood-oxygen data on the paired iPhone rather than directly on the wearable device.

This court case is not an isolated event. A separate proceeding is underway with the U.S. International Trade Commission (ITC), which is examining whether to ban the import of redesigned Apple Watch models into the United States. Although an ITC judge dismissed Masimo's request for an import ban in late December, deeming it moot, the fundamental issue remains unresolved.

Concurrently, Apple's most significant international market is showing unexpected strength. According to Barron's, imports of foreign smartphones into China have surged, indicating robust iPhone sales in a region previously watched for macroeconomic concerns.

Should investors sell immediately? Or is it worth buying Apple?

Financial and Innovation Momentum

Apple's financial results tell a story of continued growth. The company closed its fourth fiscal quarter of 2025 with revenue of $102.5 billion, an 8% year-over-year increase. Adjusted earnings per share climbed 13% to $1.85, surpassing analyst expectations. The iPhone segment contributed $49 billion, while the Services division reached an all-time high of $28.8 billion with a remarkable margin of 75.3%.

On the innovation front, Apple is showcasing tangible advances in artificial intelligence. Its new AI model, SHARP, can transform 2D photos into 3D representations in fractions of a second, rendering at over 100 frames per second.

Analyst Confidence and Leadership Transition

Market experts maintain a positive outlook. Morgan Stanley raised its price target for Apple shares to $315, while Jefferies increased its target to $283.36. The consensus among 21 analysts sits at $284, with a high-end target reaching $350.

The company is also navigating a period of executive transition. COO Jeff Williams has retired, and AI chief John Giannandrea is handing over his responsibilities to Amar Subramanya. Hardware lead John Ternus is seen as a potential successor to CEO Tim Cook. With a market capitalization of $4 trillion, Apple moves through this transitional phase with strong momentum, anticipating that its December quarter will be the most successful iPhone sales period in its history.