Apple could be on track for more gains as consumers upgrade their iPhones, according to Morgan Stanley. The bank listed the iPhone maker as one of its top picks heading into 2025 and reiterated its overweight rating alongside its $273 per share price target. Morgan Stanley’s forecast implies about 10% upside from Thursday’s close. Analyst Erik Woodring listed a potential strong handset replacement cycle in 2026 thanks to the rollout of Apple Intelligence, double-digit services growth and expanding gross margins as catalysts for Apple stock moving forward. AAPL YTD mountain Apple stock. “While we believe part of Apple’s recent string of outperformance is tied to market factors and short covering, we remain bullish on Apple’s ability to drive over $8.50 of earnings power in FY26, which we believe is also a factor helping to support near-term outperformance, with investors potentially pricing in the next iPhone cycle further ahead than past cycles,” Woodring said. “And while memory costs have risen considerably in 2024, we see a memory downcycle in 2025 representing an emerging cyclical tailwind in 2025,” the analyst said. “When combined with Services revenue growing faster than Product, we believe than Apple’s gross margins can expand by ~50bps annually over the next 3 years.” Apple has advanced nearly 29% in 2024, while the S & P 500 has gained about 27%. Analysts generally like the stock. Of the 49 who cover it, 35 rate it a buy or strong buy, according to LSEG.
