Morgan Stanley has increased its price target for Apple shares to $315, signaling renewed confidence in the company’s outlook as it heads into 2026. The investment bank also reaffirmed its “Overweight” rating, keeping Apple as a core pick for the year ahead.
The new target marks a $10 increase from Morgan Stanley’s previous forecast. Analysts say the move reflects stronger revenue expectations, steady demand for iPhones, and Apple’s ability to manage rising costs better than competitors.
iPhone Sales Remain a Key Growth Driver
According to Morgan Stanley, iPhone performance continues to anchor Apple’s growth strategy. The firm expects modest shipment increases, supported by longer replacement cycles and attractive carrier trade-in offers. As a result, more users are choosing to upgrade, even amid broader market uncertainty.
In addition, analysts believe that nearly 550 million iPhones currently in use will remain incompatible with Apple Intelligence features by the end of fiscal 2026. This gap could encourage more upgrades once new AI-driven features arrive.
Memory Costs Rise, but Apple Holds Firm
However, higher memory prices present challenges across the tech sector. Morgan Stanley warns that rising RAM costs may pressure margins for many companies. Even so, Apple appears better positioned to absorb these increases due to its strong supply chain leverage and pricing power.
While artificial intelligence infrastructure requires heavy investment, the firm does not expect Apple to monetize AI aggressively in the near term. Instead, analysts see AI as a long-term driver rather than an immediate revenue boost.
Services and Supply Chain Strength Support Outlook
Meanwhile, Apple’s Services division continues to stand out. Morgan Stanley forecasts double-digit growth in Services revenue, helped by pricing adjustments and App Store improvements. Furthermore, lower expected China tariff risks and Apple’s efficient operations add stability going forward.
Ultimately, Morgan Stanley estimates Apple’s 2027 earnings per share at $9.83, up from earlier projections. With a favorable risk-reward profile, analysts believe Apple enters 2026 with solid momentum.
