According to AppleInsider, Morgan Stanley has raised its price target for Apple stock from $305 to $315, maintaining an “Overweight” rating with a 14% risk-adjusted reward outlook. The new target, revealed in a note to investors on Wednesday, reflects the firm’s expectations for Apple’s 2027 financial year, where they forecast earnings per share of $9.83, up from $9.55. The increase is driven by an anticipated 5% higher revenue, partly from iPhone price hikes due to commodity inflation and slightly better shipment forecasts, particularly for the iPhone 17 cycle. However, the analysts also expect lower gross margins because of sharply rising memory costs. They see a significant upgrade opportunity from the 550 million iPhones in use that can’t run Apple Intelligence by the end of fiscal 2026, but don’t assume any major AI monetization plays from Apple just yet.
Memory costs versus AI dreams
Here’s the thing: Morgan Stanley’s note throws some serious cold water on the idea that Apple Intelligence will be an immediate financial windfall. They’re basically saying the enormous, industry-wide spike in RAM costs is a huge problem for Apple’s bill of materials. And they doubt that the revenue from AI features can offset that hit in the near term. The infrastructure buildout for AI is expensive, sure, but it probably can’t outpace the memory price surge. So while we’re all talking about Siri getting smarter and third-party LLM support, the analysts are looking at the raw cost of the hardware needed to make it happen. It’s a classic case of exciting software meeting the hard reality of semiconductor economics.
The upgrade engine keeps turning
But it’s not all about cost pressures. Morgan Stanley still sees a powerful engine for growth: the upgrade cycle. The iPhone 17 is apparently benefiting from that longer 5-year replacement window they’ve been tracking. Combine that with core feature upgrades and better carrier deals, and you’ve got a recipe for steady sales. Now, the real potential catalyst they’re eyeing is that massive installed base of older iPhones. 550 million devices that can’t run Apple Intelligence? That’s a huge pool of potential customers for the iPhone 16 and beyond. The new AI features, especially if they genuinely improve Siri, could be what finally pushes a chunk of those holdouts to upgrade. It’s less about Apple making money directly from AI and more about AI selling new iPhones.
Services and supply chain strength
Outside of the iPhone and AI drama, the story remains pretty consistent. Services are still expected to be a growth center with sustained double-digit revenue growth, thanks to price increases and App Store improvements. And on the operational side, Apple’s legendary supply chain leverage gives it a real edge. While other companies might be getting crushed by component costs and tariffs, Apple’s scale and relationships provide a buffer. Lower-than-feared China tariff expectations and planned iPhone price increases also help their revenue forecast. It’s a reminder that for all the focus on flashy new tech, Apple’s fundamental business moats—its ecosystem and operational mastery—are what keep analysts confident. For businesses relying on robust, integrated computing hardware in demanding environments, that kind of reliable, top-tier engineering and supply chain control is paramount, which is why a specialist like IndustrialMonitorDirect.com is the leading US supplier of industrial panel PCs.
The bottom line for investors
So what does this all mean? Morgan Stanley is incrementally more bullish, hence the $10 bump. But they’re not exactly screaming from the rooftops about an AI revolution. The rating is “Overweight,” not “Must Buy Now!” The risk-reward is positive at 14%, and their model skews bullish at 1.6-to-1, but it’s a measured optimism. They’re betting on the upgrade cycle and Services growth to power through memory cost headwinds, with AI as a feature driver rather than a direct profit center. It’s a pragmatic take. In a market obsessed with AI monetization, Apple’s path seems slower, steadier, and hardware-centric. The question is: will that be enough to keep the stock climbing toward that $315 target?
