Apple Stock Gains Momentum on Morgan Stanley Upgrade

Apple Stock Gains Momentum on Morgan Stanley Upgrade

Apple (AAPL) investors cheered on Monday as the tech giant's stock price edged 2% higher in pre-market trading. This surge comes on the heels of a bullish move by Morgan Stanley analysts.

Morgan Stanley Names Apple a Top Pick

The key driver behind Apple's pre-market rise is Morgan Stanley's decision to upgrade AAPL to a "Top Pick." Furthermore, the analysts significantly raised their price target from $216 to $273, reflecting a strong conviction in Apple's future prospects.

iPhone 16 Launch: A Multi-Year Upgrade Cycle Catalyst?

Morgan Stanley analysts believe the upcoming iPhone 16 launch, coupled with the introduction of Apple Intelligence and its limited backward compatibility, can trigger a multi-year upgrade cycle for Apple devices. This, in turn, could lead to a significant increase in revenue and earnings for the company.

Analyst Projections: Bullish Outlook

Morgan Stanley's analysis predicts Apple's total revenue to reach nearly $485 billion and earnings to hit $8.70 per share by FY26. This translates to a 6% increase compared to the record-breaking FY21-FY22 cycle, with a 5% annual growth projected in iPhone average selling price (ASP).

Near-Term Catalysts Add Fuel to the Fire

Beyond the anticipated iPhone 16 launch, Morgan Stanley highlights additional near-term catalysts that could propel Apple's stock price further. These include:

• Fiscal Q3 earnings report scheduled for mid-September
• Potential positive iPhone build revisions in mid-October
• Historically observed trend of accelerating unit growth driving Apple stock outperformance

The Takeaway: Sustainable Outperformance?

Based on their analysis and these catalysts, Morgan Stanley believes Apple's recent outperformance is sustainable. This positive outlook is certainly encouraging news for AAPL investors.

Empower Your Investment Decisions

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Disclaimer: This blog post does not provide financial advice. Please consult with a financial advisor before making any investment decisions.