Morgan Stanley: Apple ‘one AI partnership’ away from break out
Don’t say it too loudly but some analysts seem to be becoming a lot more optimistic about Apple, with Morgan Stanley suggesting the company may be turning a corner after its more recent troubles.
“Apple is one potential AI partnership away from breaking out,” they said.
Turning challenge into opportunity
“We’ve had a more guarded view on Apple since March ’25, arguing that relatively tepid Product growth, downside risk from tariffs, heightened regulatory concerns, and a lack of clear AI strategy was likely to keep Apple shares range bound,” they said, citing a range of risks that seem to be changing, if not mitigating.
The analysts do warn that they expect forward iPhone unit/revenue growth expectations to stay relatively muted, citing elongated replacement cycles and demand bottling up in anticipation of new designs. However, they also point out that tariff risk is decreasing and the impact of regulation, while it remains a risk, is not a near term challenge.
Options remain
Apple also has options to increase prices on products and services and so on. In other words, the company has options, including expectation of new models and new products as longer term benefits.
“It feels as though estimates are biased upwards from here, and historically alongside positive estimate revisions, Apple sees multiple expansion,” they said.
“In our view, Apple is one potential AI partnership away from breaking out.”
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