Morgan Stanley analyst offers new Apple stock forecast

11 Sep 2026, 19:17 · The Fresno Bee

Apple’s (AAPL) newest iPhones may finally give investors a stronger reason to believe in the company’s artificial intelligence strategy.

Morgan Stanley analyst Erik Woodring said Apple’s Sept. 9 product event showed a faster pace of hardware and software innovation than in recent years, led by its first foldable iPhone, new A20 chips, and a more capable version of Siri.

“A little of the ‘old’ mixed with a lot of the ‘new’ as CEO John Ternus heralds the next evolution of the Apple story,” Woodring said in a research note shared with TheStreet.

The event was also the first major showcase under Ternus since he replaced Tim Cook as CEO, putting him in charge as Apple tries to write a better AI story.

Woodring pointed to the new iPhone Duo, Apple’s first 2-nanometer A20 chip, stronger-than-expected upgrades to the iPhone 18 Pro lineup, and enhancements to Siri.

“In our view, today’s event previewed far more innovation than past years,” Woodring said.

The larger opportunity may come from the millions of iPhone users still holding older devices.

Morgan Stanley estimates that 57% of Apple’s iPhone installed base, involving roughly 690 million devices, is using a phone older than the iPhone 15 Pro. Meanwhile, 87% of the installed base cannot run the most complex Siri AI workloads.

That comes as consumers are keeping their iPhones for more than four years, creating a large pool of older devices that could eventually be replaced.

“We believe this pace of innovation — as well as price point premiumization — is likely to materialize in multiple years of above-trend growth, making an ‘Apple AI’ bull case now more feasible,” Woodring said.

The analyst maintained an overweight rating and a $360 price target on Apple. Here’s what he sees.

Apple enters new cycle after strong earnings

Apple is entering the new product cycle after a strong fiscal third quarter.

In July, the company reported revenue of $109.4 billion, up 16% from a year earlier, while diluted earnings per share rose 29% to $2.02. Both were June-quarter records.

iPhone was a major driver. Revenue from the business jumped 22% to $54.25 billion, while Mac revenue climbed 29% to $10.35 billion and Services revenue increased 12% to $30.74 billion.

Apple’s installed base of active devices also “reached a new all-time high across all major product categories and geographic segments,” said Apple CFO Kevan Parekh in a press release.

But investors were less impressed by the outlook. Apple forecast September-quarter revenue growth of 9% to 11%, implying a midpoint of about $113 billion, compared to the $114.9 billion analysts expected. Supply constraints still limit Apple’s ability to meet demand.

The new iPhones and Siri AI could now help determine whether Apple can accelerate growth again into fiscal 2027.

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Apple pricing strategy could help drive growth

Morgan Stanley also sees an important shift in Apple’s pricing strategy.

Apple raised the iPhone 18 Pro and Pro Max prices by $100 from last year, to $1,199 and $1,299, respectively. That was less than Morgan Stanley expected, given rising costs.

“The relatively modest $100 like-for-like price increase suggests Apple is prioritizing upgrade volume and gross profit dollars over pure margin preservation,” Woodring said.

Instead of relying only on higher prices for its newest phones, Apple also kept prices higher across older models rather than applying its traditional $100 price reduction after a new launch.

Higher trade-in values, carrier subsidies of up to $1,200 and new leasing options could also make the more expensive devices easier for consumers to buy.

Morgan Stanley believes Apple may be willing to accept some pressure on margins if that helps increase upgrades, keep users in its ecosystem, and push customers toward higher-storage models.

Its supply-chain checks suggest calendar 2026 iPhone production could approach 270 million units, up about 7% year over year. More than 70 million iPhone 18 Pro models could be built in the second half, about 15% above comparable iPhone 17 Pro production last year.

AI remains another major part of Morgan Stanley’s bull case

Apple has faced questions about whether it is falling behind rivals in the AI race. The new Siri, however, gave Woodring more confidence.

“The biggest AI surprise was how aggressively Apple expanded Apple Intelligence beyond 1P applications and into real-world workflows,” Woodring said.

Siri can now use information from messages, email, photos and apps to better understand what users are asking. Morgan Stanley was especially encouraged by Apple bringing those features to third-party apps.

The analyst pointed to Siri’s ability to work with more than 300,000 third-party apps, as well as Safari alerts for product restocks and price changes and Health integration with Quest Diagnostics.

Morgan Stanley said those features could help turn the iPhone into what it calls a “personal intelligence hub.”

Shares of Apple are up 23% year to date, trading at $334 as of this writing.

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This story was originally published September 11, 2026 at 12:17 PM.