Apple faced a turbulent start to the week when the European Union accused the company of violating the Digital Markets Act (DMA) with its App Store policies. This news initially sent Apple's stock into a downward spiral, but it managed to regain its footing and closed slightly higher.

The European Commission alleges that Apple's rules in the App Store restrict competition by preventing developers from steering users to cheaper alternatives outside the platform. This accusation is part of the wider scrutiny that big tech companies are currently facing from global regulators. Apple has the opportunity to respond to the commission's findings.

Despite the EU challenge, Apple remains steadfast in its artificial intelligence (AI) strategy, which analysts believe could spark an iPhone upgrade cycle. However, the Financial Times reports a potential setback, suggesting that Apple might postpone the launch of these AI features in Europe due to the DMA regulations.

Analyst Ben Reitzes from Melius Research remains steadfast in his positive outlook for Apple, maintaining a buy rating and increasing his price target to $260. He anticipates strong demand for new iPhones with upcoming AI features, underlining the potential for growth and success despite the challenges.

This EU challenge adds to Apple's legal issues, as the company is already dealing with an ongoing antitrust lawsuit from the US Department of Justice over its App Store and iPhone practices.

In summary, the article presents a balanced view of the situation. While the EU's accusation may impact Apple's App Store practices and AI rollout in Europe, analysts remain optimistic about the company's future, citing the potential for its AI features to boost iPhone sales.