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

JPMorgan analyst Samik Chatterjee expresses strong optimism for Apple Inc.'s multi-year growth, driven by anticipated demand for the iPhone 17 and the future foldable iPhone 18, which has significantly boosted investor sentiment. This positive outlook is reinforced by robust Services segment growth, expected stability in traffic acquisition costs post-Google-DOJ ruling, and reduced supply chain risks due to manufacturing diversification. Chatterjee forecasts Apple to surpass consensus estimates for Q4 revenue and EPS, projecting these product cycles and operational efficiencies to accelerate revenue growth and expand margins through fiscal 2026 and 2027.

Analysis

JPMorgan analyst Samik Chatterjee projects a strong multi-year growth outlook for Apple (AAPL), driven by robust demand for the iPhone 17 and anticipation for the foldable iPhone 18. This positive product cycle visibility has significantly boosted investor sentiment, with expectations for accelerated revenue growth through fiscal 2026 and 2027. The analyst highlights this as the strongest investor sentiment in a year for the company.

Chatterjee forecasts Apple to exceed consensus estimates for the upcoming fiscal fourth quarter, predicting $103 billion in revenue and $1.81 EPS, surpassing the $102 billion and $1.77 consensus. The Services segment continues its strong performance, growing approximately 13% in Q3 and expected to maintain this pace into Q4, further supported by the Google-DOJ ruling suggesting minimal impact on Google's traffic acquisition costs paid to Apple.

Operational efficiencies and strategic shifts, such as the accelerated manufacturing diversification to India and Vietnam, are expected to reduce tariff and supply chain risks. These factors, combined with easing tariff pressures, are anticipated to drive margin expansion and future earnings upgrades, reinforcing the stock's potential upside beyond current earnings revisions.

Key Decisions for Investors

• Investors should consider maintaining or increasing exposure to Apple (AAPL) shares, given the strong analyst outlook and positive multi-year product cycle expectations.
• Monitor upcoming earnings reports for confirmation of the Services segment's sustained growth and the initial sales trajectory of the iPhone 17 series.
• Evaluate the company's progress in manufacturing diversification and its impact on supply chain resilience and potential margin expansion.