![\"Apple](\"https:\/\/s.yimg.com\/lo\/mysterio\/api\/dc6f05059c9268623e7c3f28c4d36d99418d20d33429bfa27173a155ae440039\/lightyear_networkapi\/resizefit_w960%3Bquality_80%3Bformat_webp\/https%3A%2F%2Fmedia.zenfs.com%2Fen%2Finsidermonkey.com%2Fa0cb88158fe64431726accde4ec7ad62.jpg\")
<\/a> Apple (AAPL) Faces Mixed Outlook Ahead of Foldable iPhone Launch <\/p>\nApp Store Weakness Raises Concerns<\/strong> <\/p>\n On September 2, Evercore ISI reiterated its Outperform rating on the stock with a $365 price target following August App Store revenue data. <\/p>\n App Store revenue fell 1% year-over-year in August, marking the first year-over-year decline since November 2022 and the sixth consecutive month of deceleration. Gaming revenue declined about 10% year-over-year in August after seeing a fall of 8% in July. <\/p>\n U.S. App Store revenue declined for the sixth consecutive month, seeing a 10% year-over-year fall in August. Evercore ISI warned that continued weakness in App Store revenues could make it more difficult for Apple Inc. (NASDAQ:AAPL) to achieve double-digit Services growth. However, the research firm noted that the company has been able to offset softer App Store trends with faster-growing areas of its Services business. <\/p>\n Expected Foldable iPhone Could Drive Growth<\/strong> <\/p>\n Evercore’s concerns center on near-term Services momentum, while Morgan Stanley sees the expected foldable iPhone as a potentially meaningful new growth driver. <\/p>\n Morgan Stanley believes the expected foldable iPhone could generate around $14 billion in revenue in the December quarter. Analyst Erik Woodring said, ahead of the September 9 event, that “Apple’s first foldable iPhone is the biggest iPhone form-factor change since iPhone X.” <\/p>\n Morgan Stanley believes that the company will see strong initial demand but also some supply constraints. The firm estimates 7 million to 8 million builds in the second half of 2026 and as many as 20 million units over the first product cycle. <\/p>\n The launch could also prove to be an important test for Apple Inc.’s (NASDAQ:AAPL) pricing power. Morgan Stanley expects to see some of the largest like-for-like iPhone price increases in the company’s history. The analyst noted that rising NAND and DRAM costs are expected to push Pro models more than $200 higher year-over-year. <\/p>\n Morgan Stanley pointed out that Apple Inc. (NASDAQ:AAPL) appears “more focused on securing enough components than finding enough buyers,” although memory supply could limit near-term builds. <\/p>\n Woodring believes that the “event will prove to be anything but ordinary.” He added that this “is because for the first time in 15 years, Tim Cook will not headline the event; instead, new CEO John Ternus will lead the company into its first major iPhone form factor change in nearly 10 years, unveiling the much-anticipated iPhone Fold (Ultra?), alongside what are likely to be the broadest, and most significant, like-for-like iPhone price hikes in company history.” <\/p>\n Hedge Fund Interest<\/strong> <\/p>\n Hedge fund interest in Apple Inc. (NASDAQ:AAPL) has declined slightly. According to Insider Monkey<\/strong><\/a>‘s database, 169 hedge funds held positions in the stock in the second quarter of 2026, down from 170 funds in the first quarter. <\/p>\n Apple is currently trading at 33.22 times forward earnings. As of August 14, short interest stood at 0.80% of the company’s float. <\/p>\n For investors, the key focus will be whether Apple Inc. (NASDAQ:AAPL) can sustain its momentum under new CEO John Ternus and turn the upcoming iPhone launch into a new source of growth. <\/p>\n 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 <\/a>best short-term AI stock<\/strong><\/a>. <\/p>\n READ NEXT: <\/strong>Rosenblatt Sees Booking (BKNG) as the Best-Positioned Online Travel Agency Despite Challenges<\/strong><\/a> and <\/strong>Baird Upgrades Deere (DE) to Outperform on Hopes of Recovery<\/strong><\/a>.<\/strong> <\/p>\n