Apple shares rose after the company unveiled the iPhone 18 Pro and its first foldable device, the iPhone Duo, with analysts saying Apple is balancing higher prices against consumer demand. Morgan Stanley reaffirmed a $360 price target on the stock, citing the foldable and AI features as catalysts for an upgrade cycle heading into fiscal 2027.
Apple shares were set to rise on Thursday after the company launched several new products, including the iPhone 18 Pro and the foldable iPhone Duo, with analysts noting the company's effort to keep luring cost-wary consumers. Apple unveiled the iPhone Duo on September 9, alongside updated Apple Watches and AirPods 5.
Analysts see a pricing tightrope
A team of Goldman Sachs analysts led by Michael Ng said the new lineup should drive continued strength in device demand, and noted that launching a higher-end iPhone 18 model in the fall while saving lower-cost phones for spring should help Apple keep a lid on rising costs.
Jefferies analysts led by Edison Lee suggested Apple appears focused more on unit volume than margins. He pointed out that the $100 price hikes on newer and earlier-generation phones came in below the $150 to $200 increases on iPad and MacBooks instituted this summer. JPMorgan analysts led by Samik Chatterjee said Apple is walking a "tightrope on products to preserve volumes and margins", according to MarketWatch, adding that a new leasing program and trade-in offers give consumers flexibility.
Morgan Stanley raises the bar to $360
Morgan Stanley analyst Erik Woodring reaffirmed an Overweight rating on Apple with a price target of $360, up from $330 following Apple's WWDC 2026 event in June. The bank had briefly raised the target to $364 before trimming it back in July on near-term friction in Services growth and rising memory costs.
The iPhone Duo ships with a 7.6-inch inner display and starts at $1,999 for the 256GB configuration, with pre-orders opening October 16 and general availability following on October 23. Morgan Stanley estimates the foldable could contribute roughly $14 billion in revenue during the December 2026 quarter alone, despite being a low-volume device by Apple's standards.
Why the AI upgrade cycle matters
Between roughly 850 million and 1.3 billion iPhones in use lack the hardware needed to support full Apple Intelligence functionality, a pool of potential upgraders Morgan Stanley is counting on. Under the bank's optimistic AI adoption scenario, analysts project mid-teens growth for Apple's hardware segment and over 10% growth for Services in fiscal 2027, supporting an estimated EPS of approximately $10.30.
However, a foldable's share of iPhone revenue is not the same as extra growth. Apple reported approximately $209.6 billion in iPhone revenue and $416.2 billion in total revenue in fiscal 2025, and a customer buying a $2,000 foldable instead of a $1,300 conventional iPhone adds only $700 in incremental spending before costs — a substitution effect known as cannibalization.
Sources: MarketWatch, Crypto Briefing, InvestingLive
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