Apple iPhone 17 Demand Could Exceed Expectations: Gene Munster Says 'Upside Over The Next Year' Coming

Deepwater Asset Management's Gene Munster reports strong early demand indicators for Apple's iPhone 17, with average lead times of 2.6 weeks across eight countries, significantly up from 1.7 weeks for the iPhone 16, and notable strength in China. This robust hardware demand is projected to drive iPhone revenue growth of 8% for the current quarter and fiscal 2026, surpassing Street consensus estimates and suggesting upside potential for AAPL stock, despite previous concerns regarding the company's AI strategy. Apple's stock reacted positively, rising 3.6% on the news.

Analysis

Early demand indicators for Apple's iPhone 17 suggest a stronger-than-expected sales cycle, potentially driving upside for the stock. According to analysis from Deepwater Asset Management, average lead times across eight countries are 2.6 weeks, a notable increase from the 1.7-week average for the iPhone 16 at the same point last year. Demand in China appears particularly robust, with lead times of 4.4 weeks representing a 119% year-over-year increase, and JD.com reporting higher first-day pre-orders. These leading indicators support a forecast for 8% year-over-year iPhone revenue growth in both the current quarter and fiscal 2026, surpassing consensus Street estimates of 7% and 5%, respectively. While this projected 8% growth is not considered a 'supercycle' on the scale of fiscal 2021's 39% expansion, it signals a significant improvement. This hardware strength is seen as sufficient to offset concerns around Apple's perceived stumble with its AI strategy, with the analyst noting that a compelling device can outweigh the current promises of Apple Intelligence. The market has reacted positively to these signals, with AAPL stock climbing 3.6% to $254.27.

Key Decisions for Investors

• Investors should consider the potential for an earnings beat and upward revisions to fiscal 2026 estimates, as current iPhone 17 lead times, especially in China, materially exceed prior-year metrics and consensus expectations.
• While hardware demand appears strong, the acknowledged 'significant product miss' on Apple Intelligence remains a key risk; monitor for any shift in consumer preference toward competitors with more advanced AI features or for details on Apple's future AI roadmap.
• For the stock's positive momentum to continue, Apple will likely need to exceed current quarter estimates and issue stronger-than-expected forward guidance, making the next earnings release a critical catalyst to watch.