Apple’s latest iPhone cycle is prompting Wall Street to rethink the company’s trajectory, with Morgan Stanley signaling room for more upside.
In a new client note, the bank maintains its overweight rating and raises its price target for Apple (AAPL) from $240 to $298, citing a better-than-expected start to the iPhone 17 cycle, reports Investing.com.
Morgan Stanley analysts note that while the market has largely priced in early demand, there remains “a positive bias to T12M (trailing 12-month) estimates, and the early drivers of iPhone 17 strength get us more excited about the iPhone 18 cycle.”
But the analysts say the biggest catalyst is a wave of upgrades from Apple’s aging installed base, combined with the company’s plan to launch its first foldable iPhone alongside six new models in the next cycle. That backdrop supports “high-single digit year-on-year iPhone revenue growth extending into FY27, even before we make any assumptions around AI.”
Morgan Stanley also lays out its AAPL bull-case scenario, where the tech giant delivers more than 270 million iPhone shipments and $10.16 of EPS, a figure it says is achievable if foldables and AI spark stronger demand.
In a recent CNBC interview, Erik Woodring, Morgan Stanley’s head of US technology hardware research, says Apple’s AI will hinge on partnerships with firms like OpenAI, Google, or Anthropic, with Apple acting as the distribution layer through Siri and Apple Intelligence.
“Now, I believe that ultimately kind of this next evolution of AI and some of those features are somewhat like outsourced AI, and Apple becomes the distribution arm of that, which you can monetize from both a hardware and a services perspective.”
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