Morgan Stanley Raises Apple Stock Price Target Amid Optimistic Forecasts
Morgan Stanley has recently increased its price target for Apple Inc. (AAPL) to $315, up from the previous $305, while maintaining an Overweight rating on the stock. This adjustment reflects a positive outlook on Apple’s financial performance, despite anticipated challenges such as rising memory costs and extended product replacement cycles.
Revised Earnings Projections
The investment bank’s updated price target is based on a 32x multiple applied to its revised fiscal year 2027 earnings per share (EPS) estimate of $9.83, an increase from the earlier forecast of $9.55. This revision indicates confidence in Apple’s ability to generate higher earnings in the coming years.
iPhone Shipments and Replacement Cycles
Morgan Stanley anticipates a slight increase in iPhone shipments. However, they also project that consumers will hold onto their devices for approximately one month longer than before, leading to an extended replacement cycle. This trend suggests that while unit sales may see modest growth, the frequency of upgrades could decrease.
Gross Margin Considerations
The firm forecasts a 130 basis points decline in Apple’s gross margin. This expected decrease is attributed to higher memory input costs. To mitigate these costs, Apple is likely to implement price increases, resulting in a 5% higher revenue forecast that accounts for commodity cost inflation.
Investment in Artificial Intelligence
Morgan Stanley also notes that Apple’s increased investments in artificial intelligence (AI) will lead to elevated operating expenses compared to historical patterns. These investments are seen as essential for maintaining a competitive edge in the rapidly evolving tech landscape.
Market Performance
As of the latest trading session, Apple shares closed at $271.84, reflecting a 1.01% decline. Earlier this month, the stock reached a 52-week high of $288.61, driven by optimism surrounding the upcoming iPhone 17 upgrade cycle and other positive factors.
Historical Context
This upward revision follows a series of adjustments by various financial institutions in response to Apple’s performance and market conditions. For instance, in June 2025, JPMorgan reduced its price target for Apple from $240 to $230, citing weaker iPhone 17 expectations and a slower-than-anticipated AI strategy rollout. Despite this, the firm maintained an Overweight rating, indicating long-term confidence in Apple’s prospects. ([9to5mac.com](https://9to5mac.com/2025/06/26/jpmorgan-cuts-apple-stock-price-target/?utm_source=openai))
In contrast, in September 2025, Bank of America raised its price target for Apple to $260, up from $250, following a favorable ruling in Google’s antitrust case. This decision was expected to benefit Apple indirectly, contributing to a 3.8% rise in the company’s stock during that period. ([9to5mac.com](https://9to5mac.com/2025/09/03/bank-of-america-boosts-apple-stock-target-on-google-antitrust-win/?utm_source=openai))
Analyst Perspectives
Analysts have varied in their assessments of Apple’s strategic moves. In July 2025, Morgan Stanley cautioned against the idea of Apple acquiring an AI search engine, describing it as misguided. The firm argued that such a move would not align with Apple’s core objectives and could divert focus from its primary business areas. ([9to5mac.com](https://9to5mac.com/2025/07/21/morgan-stanley-warns-against-misguided-idea-of-apple-acquiring-an-ai-search-engine/?utm_source=openai))
However, in August 2025, Morgan Stanley expressed optimism, suggesting that Apple stock could be turning the corner due to strong iPhone demand. The firm highlighted better-than-expected iPhone sales in the June quarter and increased build forecasts for the September quarter as key factors supporting this positive outlook. ([9to5mac.com](https://9to5mac.com/2025/08/15/morgan-stanley-says-apple-stock-could-be-turning-the-corner-on-strong-iphone-demand/?utm_source=openai))
Market Capitalization Milestone
In July 2024, Apple reclaimed its position as the most valuable company globally, achieving a market capitalization of $3.62 trillion. This milestone was driven by a 2.5% stock increase following Morgan Stanley’s recognition of Apple’s advancements in AI, which were anticipated to boost device sales. ([9to5mac.com](https://9to5mac.com/2024/07/16/apple-most-valuable-company/?utm_source=openai))
Conclusion
Morgan Stanley’s recent adjustment of Apple’s stock price target to $315 reflects a nuanced understanding of the company’s current position and future potential. While challenges such as increased component costs and extended product cycles are acknowledged, the firm’s confidence in Apple’s strategic investments, particularly in AI, underscores a positive long-term outlook.
