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Morgan Stanley has slightly raised its revenue estimates for Apple following the launch of the iPhone 18 Pro lineup and updated Mac models. Despite this, the firm lowered its stock price target from $360 to $355, maintaining an 'Overweight' rating. Analysts highlighted strong iPhone production volumes and pricing upside from Mac and Services, but flagged lower iPhone average selling prices and rising memory costs as significant headwinds. The report also noted that agentic AI could pose both risks and opportunities for Apple's ecosystem, particularly in areas like discovery and transaction control.
Apple's fiscal Q3 revenue reached $109.4 billion, a 16% year-over-year increase, with record contributions from iPhone, Mac, and Services. However, analysts caution that cost pressures and the evolving AI landscape could limit Apple's ability to convert revenue growth into proportional earnings gains.
Investment implication: While Apple's product lineup remains a revenue driver, rising costs and pricing adjustments could constrain profitability. For you, this highlights the need to track Apple's ability to balance innovation with cost management, as these factors may influence competitive dynamics and market share in premium devices and services.