Morgan Stanley weirdly bullish on iPhone as it trims Apple stock price target

Investment bank Morgan Stanley says there are signs of increased iPhone, Mac, and Services revenue for Apple, but it has cut its target price by $10.

One week after claiming that Apple has increased its June quarter iPhone orders, Morgan Stanley now says that there are also rises in demand for other devices. Specifically, in a note to investors seen by AppleInsider, its analysts say that Mac shipments have grown year over year, which contributes to a rising March quarter revenue.

The analysts further say that the supply chain is reporting around a 5% increase for the iPad above forecasts, or 11 million units instead of 10.5 million. Morgan Stanley has hiked its forecast for Services by 1%, based on what it believes to be stronger than expected App Store performance.

Overall, the investment bank is positive about Apple, yet it has cut its price target to $210. It's increasing its forecast for the March quarter because of iPhone, Mac, iPad, and Services, but then cuts its June revenue prediction by 1% because of the strength of the US dollar.

Beyond its forecasts, the analysts say that the most significant issues they are watching for in the March quarter are Apple's total revenues, and more specifically China revenues. They also want to see how Services revenues grow.

Morgan Stanley is further looking for signs in Apple's March 2024 report of an increase in AI-related research and infrastructure. However, it doesn't expect to learn much more about Apple's AI efforts until WWDC in June.

That's still more positive than JP Morgan, which recently told its investors that AI would not have a great impact on Apple earnings until the iPhone 17 in 2025. Wedbush, on the other hand, sees AI returning Apple to growth with the iPhone 16 range.

Apple is due to announce its Q2 2024 earnings on May 2, 2024.