Morgan Stanley Boosts Apple (AAPL) Target, Sees Upside From Pricing Power and AI

Apple Inc. (NASDAQ:AAPL) is one of the AI Stocks on the Market’s Radar. On December 17, Morgan Stanley raised its price target on the stock to $315.00 from $305.00 while maintaining an Overweight rating.

According to the firm, the new $315 price target reflects an “unchanged 32x multiple on our new FY27 EPS of $9.83 (up from $9.55).” Earnings expectations for FY27 were raised on higher revenue from price hikes, a slightly higher iPhone shipment forecast, despite lower gross margins and an unchanged opex trajectory.

Overall, the firm remains confident in Apple’s pricing power and AI investment payoff.

“3% upward revision to FY27 EPS is a function of (1) 130bps lower gross margin due to higher memory input costs, (2) 5% higher revenue to reflect price hikes due to commodity cost inflation, and a slightly higher iPhone shipment forecast assuming 0.1- year Y/Y replacement cycle elongation, and (3) a largely unchanged opex trajectory that is elevated vs. historical seasonality given incremental investments in AI. As such, we remain Overweight-rated with a 14% risk-adjusted risk/reward and a 1.6 bull-to-bear skew.”

Apple is a technology company known for its consumer electronics, software, and services.

While we acknowledge the potential of AAPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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