Investing.com — Morgan Stanley said Apple could be \u201cturning the corner\u201d after stronger-than-expected iPhone sales drove an upward revision in September-quarter production plans.<\/p>\n
The bank\u2019s Greater China Technology Hardware team lifted its September-quarter iPhone build forecast by 8%, from 50 million units to 54 million units, citing \u201cbetter than expected iPhone sell-through in the June quarter\u201d and \u201clow channel inventory\u201d that created a \u201clarger channel fill opportunity.\u201d<\/p>\n
The revision was \u201centirely iPhone 16 (2M units) and Pro Max (2M units) models.\u201d<\/p>\n
While the firm already factored in a similar trend with its 55 million shipment forecast for the quarter, Morgan Stanley said the build increase raises the potential for upside in the December quarter.<\/p>\n
The analysts explained that based on historical seasonality, December builds could range from 73 million to 92 million units, but the analysts expect a more realistic 73 million to 81 million, translating to 76 million to 84 million shipments.<\/p>\n
C2H25 iPhone 17 builds remain unchanged at 80 million to 85 million units, compared with 84 million for the iPhone 16 in C2H24.<\/p>\n
On the stock, Morgan Stanley said it is \u201cturning more bullish\u201d after being cautious since March. It reiterated an Overweight rating and a $240 price target on the stock.<\/p>\n
\u201cWe think the Apple story could be turning the corner,\u201d stated the bank, pointing to cited \u201celongated replacement cycles,\u201d \u201cpent-up iPhone demand,\u201d \u201cstructural gross margin tailwinds,\u201d and easing tariff and regulatory headwinds.<\/p>\n
Pricing remains an \u201cunder-appreciated lever,\u201d with Apple yet to raise services prices in two years.<\/p>\n
\u201cEstimates are biased upwards from here,\u201d the analysts wrote, adding that Apple could see \u201cmultiple expansion\u201d if forecasts improve.<\/p>\n
With institutions \u201cmore underweight Apple than any other megacap tech stock\u201d and hedge funds \u201cbiased neutral to short,\u201d Morgan Stanley said the company is \u201cone potential AI partnership away from breaking out.\u201d<\/p>\n
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