Apple is heading toward a powerful start to 2026, driven largely by strong demand for the iPhone 17. According to a new note from Morgan Stanley, Apple’s first-quarter results are likely to exceed expectations, positioning the company for one of its strongest financial quarters yet.
The investment firm forecasts Apple’s Q1 2026 revenue at $139.5 billion, reflecting a 12.3% year-over-year increase. In addition, earnings per share are projected to reach $2.70, signaling solid momentum across Apple’s product lineup.
iPhone 17 Leads the Growth Story
At the center of this optimism sits the iPhone 17. Morgan Stanley estimates that iPhone revenue alone will reach $80 billion, about 4% above market consensus. Supply chain checks point to stronger-than-expected shipments during both the December and March quarters.
Notably, Apple may ship around 90 million iPhones in the December quarter. Meanwhile, March quarter build orders could climb to 56 million units, suggesting total shipments near 60 million. As a result, analysts believe this cycle ranks among the strongest iPhone launches in recent years.
Apple CEO Tim Cook has also expressed confidence, previously stating that customer response to the iPhone 17 has been “off the chart.” Consequently, Apple expects Q1 2026 to become the best quarter in its history.
Other Product Lines Remain Steady
Beyond the iPhone, Morgan Stanley projects balanced performance across Apple’s ecosystem. For example, Services revenue may reach $29.8 billion, while Mac sales could hit $9.3 billion. In addition, iPad revenue is expected at $7.98 billion, and Wearables, Home, and Accessories may bring in $12.5 billion.
Together, these segments help stabilize Apple’s revenue mix and reduce reliance on a single product category.
Memory Costs Pose a Future Risk
However, challenges loom. Rising memory prices could pressure margins later in 2026. Morgan Stanley warns that NAND prices may rise by 55% to 60%, while mobile DRAM costs could jump over 50% in coming quarters.
For now, Apple appears protected due to existing lower-cost inventory. Still, analysts expect Apple may raise future iPhone prices to offset these costs.
