Buy Apple stock ahead of expected $200 iPhone price hikes: Morgan Stanley

Investing.com -- Morgan Stanley expects Apple (NASDAQ: AAPL) to raise iPhone prices by approximately $200 in September, a move the firm estimates could deliver 2–4% upside to F3Q26 EPS and roughly 1% upside to FY27 EPS estimates. All else equal, Morgan Stanley analysts see a bullish setup that the market has not fully priced in.

"The market is increasingly focused on the impact of price hikes on Apple fundamentals," Morgan Stanley analysts led by Erik Woodring wrote in a research note maintaining their Overweight rating on the stock. "Our analysis suggests higher prices = higher earnings power."

The brokerage firm argues that Apple's hardware customers, particularly iPhone buyers, have historically shown limited sensitivity to price increases.

"Apple's core product (i.e. iPhone, Mac, and iPad) demand has been somewhat inelastic, with iPhone being the most inelastic product within Apple's product ecosystem, followed by Mac and then iPad."

That hierarchy matters: if the most expensive and most frequently replaced product in Apple's lineup is also the one consumers are least likely to abandon due to a price increase, then a roughly $200 hike represents a largely clean margin and earnings tailwind.

Morgan Stanley reinforced that view by pointing to the competitive landscape, noting that "recent price increases are unlikely to materially disrupt demand, especially considering supply challenges at peers." With rivals constrained on supply, consumers have fewer credible alternatives, reducing the risk that sticker shock translates into lost unit volumes.

The firm's supply chain checks add a further layer of conviction. Morgan Stanley said its proprietary channel work indicates "iPhone build plans have remained largely unchanged in the last several weeks," suggesting that contract manufacturers and component suppliers are not signaling any demand softness ahead of the September launch.

On the non-iPhone side, the firm noted it has "not observed any meaningful changes in Mac or iPad lead times" despite recent price increases in those product lines, which Morgan Stanley interprets as evidence that Apple is successfully executing a broader margin-preservation strategy as memory costs rise.

The bank flagged three near-term catalysts it expects investors to monitor: the June quarter earnings report and September quarter guidance, the September launch of the iPhone 18 Pro, Pro Max, and the first-ever Apple Foldable, and the public beta release of a revamped Siri AI. Each of these events carries the potential to reset market expectations in Apple's favor, and the confluence of all three in a compressed window gives the bull case unusual near-term density.

Looking further out, Morgan Stanley sees a durable multi-year product cycle taking shape. The bank specifically highlighted the first-ever Apple Foldable, an improved iPhone Air 2, and the anticipated 20th anniversary iPhone lineup as products that "should support healthy iPhone demand through FY27 and FY28."

That roadmap, paired with a longer-horizon AI thesis, gives the Overweight rating legs well beyond the September event. "We continue to see a longer-term path toward an AI-driven replacement cycle as Apple Intelligence and Siri AI functionality steadily improves," the firm wrote.

With June quarter results and September guidance serving as the first major test of that thesis, investors will have a relatively short wait to see whether Apple's pricing confidence matches what Morgan Stanley's supply chain work implies.

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