Morgan Stanley gives Apple Inc. (AAPL.US) a "overweight" rating: iPhone demand "remains strong," upgrade cycle may be underestimated.

A survey released by Morgan Stanley shows that Apple Inc.'s iPhone sales performance is "continuously strong", and user upgrade rates are at a record high. Analyst Eric Woodlin of the firm gave Apple Inc. a "hold" rating with a target price of $315. According to the survey results, it is expected that Apple Inc. will be the only major smartphone designer this year to gain market share. In a report to clients, Woodlin wrote: "In our AlphaWise smartphone survey at the end of 2025, Apple Inc.'s performance was extremely impressive. The upgrade rate of iPhones in China has increased by 9 percentage points compared to the same period last year; the global iPhone upgrade rate has reached the highest level in the history of this survey; the proportion of users converting to Apple Inc. has reached a peak in nearly 5 years; the average expected storage capacity has shown strong growth, increasing by 18% year-on-year; and users have shown high interest in foldable iPhones, accounting for 27% of the sampled user group." Furthermore, in the AlphaWise global smartphone survey released at the end of 2025, the iPhone's overall upgrade rate reached 37%, an increase of 2 percentage points from the same period last year, especially in China where the upgrade rate hit a historical high. The survey also indicates that consumer awareness and willingness to pay for Apple Intelligence has slightly decreased. Woodlin added: "Overall, these results support our forecast for iPhone revenue in the 2026 fiscal year, which is 3% higher than market expectations (expected market growth of 3%, our forecasted growth of 6%), and indicate strong growth potential for the average selling price (ASP) of foldable iPhones in the 2027 fiscal year, surpassing market trends. We predict that iPhone revenue in the 2027 fiscal year will be 4% higher than the market's general expectations, meaning that iPhones will see the strongest consecutive two-year growth in over a decade." As of the time of writing, Apple Inc. has risen by 2.23% in pre-market trading, reaching $253.54.