Apple’s shares jumped 3% in premarket trading Friday after Morgan Stanley hiked its price target to $330 from $315, sticking with an Overweight rating. The move came one day after the iPhone maker’s fiscal second-quarter earnings beat expectations. Services revenue surged 16.3% year-over-year in the March quarter, topping the company’s own 14% guidance. And that June quarter gross margin outlook? 47.5% to 48.5%. Higher than Wall Street figured, even with memory costs climbing.
First half of fiscal 2026 tells the story. Revenue up 16%. Earnings per share up 20%. Morgan Stanley responded by bumping its fiscal 2026 EPS forecast to $8.89 from $8.63, and fiscal 2027 to $10.23 from $9.76. Valuation multiple stays at 32 times earnings. No change there. But the confidence? Palpable. Yahoo Finance first reported the adjustment on April 30.
Beating Headwinds Where Others Falter
Erik Woodring, Morgan Stanley’s hardware analyst, called it a ‘clean’ report with a ‘remarkable’ margin guide. The firm now sees Apple better equipped to handle record cost inflation. iPhone strength. Mac upside. Services firing on all cylinders. That’s the offset to those memory pressures everyone fretted over. Apple pulled it off. Investors noticed. Shares closed up sharply post-earnings.
Not alone in the optimism. Wells Fargo lifted its target to $310 from $300, Overweight intact. Baird to $310 from $300, Outperform. Monness Crespi Hardt to $335 from $315, Buy. Wedbush holds at $350, Buy. Even skeptics nudged higher: Rosenblatt to $276 from $268, Neutral; Barclays to $253 from $248, Underweight. Wall Street’s average now hovers around $304, implying 8-9% upside from recent levels, per MarketBeat. X chatter echoed the bullish wave, with accounts like @StockMKTNewz tallying the upgrades.
But dig deeper. Apple’s gross profit margin hit 47.33% over the last 12 months. Return on equity? A staggering 152%, according to Investing.com. Services aren’t just growing. They’re the profit engine now, less tied to hardware cycles. Memory costs bite, sure. Yet Apple guided above consensus anyway. That signals pricing power. Supply chain savvy. Optionality ahead: WWDC announcements. Foldable iPhone rumors. AI tailwinds still building.
Context matters. Pre-earnings, Morgan Stanley held at $315, calling Apple a ‘tactical long’ despite margin worries. They argued iPhone, Mac, and Services would drive revenue 1-5% above consensus for March and June quarters. Earnings proved them right. Now, post-results, the firm dials up conviction. Valuation at roughly 28-34 times forward EPS, depending on whose estimate. Midpoint of history. Not cheap. But justified if growth holds.
Street Divide Sharpens on Next Leg Up
Not everyone’s cheering. Trading at 34.79 times earnings, Apple looks stretched to some, with a $3.98 trillion market cap. P/E above fair value, says InvestingPro. HSBC holds at $260, Hold. DA Davidson at $270, Neutral. Jefferies at $299.88, Hold. Bears point to China slowdown risks. iPhone refresh timing. Tariff shadows. Yet the post-earnings lift suggests momentum favors bulls—for now.
Apple’s first-half fiscal 2026 numbers crush prior years. Services beat. Margins resilient. Guidance bold. Morgan Stanley’s hike captures that shift. From priced-in pain to proven execution. Fiscal 2027 EPS at $10.23? That’s 5% above Street. At 32x, $330 makes sense. Shares could test $300 by September on revisions alone, Woodring noted pre-earnings in a TipRanks report.
Leadership chatter adds spice. Tim Cook’s era winding down? Morgan Stanley floated CEO transition optimism pre-earnings, no target change then. Now, with results in hand, focus sharpens on execution. Product cycles. China rebound. AI bets. Apple’s no longer just hardware. It’s a services behemoth with sticky ecosystem lock-in.
Short punch: Bulls winning. Bears muttering. Earnings deliver. Targets climb. Apple’s path? Higher. For insiders tracking multiples and margins, this $330 call demands attention. Execution like this doesn’t happen by accident.
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