Apple's Upcoming Foldable iPhone Model Will Drive Major Upside: Analyst

JPMorgan analyst Samik Chatterjee projects a strong multi-year growth outlook for Apple, driven by robust iPhone 17 demand, anticipation for the foldable iPhone 18, and sustained strength in the Services segment, which grew 13% in Q3. The analyst notes that reduced supply chain risks from manufacturing diversification and minimal impact from the Google-DOJ ruling further bolster confidence. Chatterjee forecasts Q4 revenue of $103 billion and EPS of $1.81, surpassing consensus, expecting these factors to accelerate high single-digit revenue growth through FY26/27, leading to margin expansion and significant stock upside.

Analysis

JPMorgan analyst Samik Chatterjee projects a strong multi-year growth outlook for Apple (AAPL), citing robust demand for the iPhone 17 and anticipation for the foldable iPhone 18. This sentiment, the strongest in a year, is bolstered by improved iPhone demand data and stabilization across Apple's broader business, rebuilding investor confidence. This positive product cycle is expected to drive valuation multiple expansion beyond earnings revisions.

The Services segment remains a key driver, demonstrating 13% growth in fiscal Q3 and expected to maintain this pace into Q4, despite concerns over new "link-out" payment options. Furthermore, a recent Google-DOJ ruling suggests minimal impact on Google's traffic acquisition costs paid to Apple, reinforcing Services revenue stability. Chatterjee forecasts Q4 revenue of $103 billion and EPS of $1.81, exceeding consensus estimates of $102 billion and $1.77, respectively.

Operational efficiencies and strategic shifts are also contributing positively. Apple's accelerated manufacturing diversification outside China, particularly to India and Vietnam, alongside increased U.S. investments, significantly reduces exposure to tariffs and supply chain risks. These factors, combined with the positive product cycles, are expected to accelerate high single-digit revenue growth through fiscal 2026 and 2027, driving margin expansion and potential earnings upgrades.

Key Decisions for Investors

• Investors should consider the potential for continued upside in Apple shares, driven by the anticipated iPhone 17/18 product cycles and sustained Services segment growth.
• Monitor upcoming earnings reports for confirmation of high single-digit revenue growth and margin expansion, particularly in Q4 FY25 and Q1 FY26, as forecasted by JPMorgan.
• Evaluate Apple's strategic supply chain diversification and its impact on long-term risk reduction and operational efficiency, which could further support valuation multiples.