How can Apple's stock reach $300? Wall Street is already dreaming about the iPhone 18.

Morgan Stanley has raised its price target for Apple (AAPL) to $298, increasing its FY2026 iPhone revenue estimate to $230.3 billion, above consensus, due to stronger-than-anticipated iPhone 17 demand driven by upgrade cycles. While current demand is largely priced in, analysts see significant further upside potential, with a bull case of $376, driven by the anticipated introduction of foldable iPhones and substantial AI features in the iPhone 18 cycle for FY2027, which could catalyze a major upgrade supercycle and higher unit shipments, with these opportunities expected to be priced in more materially by early next year.

Analysis

Morgan Stanley has issued a bullish update on Apple Inc. (AAPL), raising its price target to $298 and its fiscal 2026 iPhone revenue estimate by 4% to $230.3 billion, a figure that stands above the consensus view of $220 billion. This revision is primarily driven by stronger-than-anticipated unit sales for the upcoming iPhone 17, as evidenced by lengthening lead times and demand from users of older models. However, analysts note that the stock's approximate 20% gain over the past three months likely already reflects this near-term optimism. The potential for further significant appreciation is contingent on clearing a higher bar set by the iPhone 18 cycle in fiscal 2027. The firm's bull case outlines a path to a $376 stock price, predicated on two major catalysts: the introduction of a foldable iPhone and the integration of compelling artificial intelligence features. Achieving this target would require Apple to ship 270 million iPhones and generate over $10 in earnings per share for FY2027. Morgan Stanley anticipates that the market will begin to price in these longer-term opportunities more materially by early 2025.

Key Decisions for Investors

• Investors should recognize that while the strong iPhone 17 demand is a positive fundamental, it appears largely priced into the stock's recent 20% gain, suggesting near-term upside may be limited.
• The primary drivers for significant future upside are tied to the FY2027 iPhone 18 cycle, specifically the successful launch of a foldable device and the integration of compelling AI features that could trigger a new upgrade supercycle.
• It may be prudent to monitor for a potential market re-rating of the stock in early 2025 as it begins to price in these longer-term catalysts, while tracking progress toward the bull-case metrics of 270 million unit shipments and over $10 in EPS for FY2027.