UBS Group AG maintains a "Neutral" rating on Apple Inc. (AAPL.US): iPhone 18 demand improves marginally, but China remains the "biggest soft spot"

UBS Group AG said Apple Inc. (AAPL.US) is showing marginal signs of improvement in iPhone 18 demand, although China remains the main weak spot in the company's latest supply chain and wait-time data. The firm maintained a "Neutral" rating on Apple Inc. with a price target of $296. UBS Group AG's Evidence Lab found that average wait times for the iPhone 18 Pro and Pro Max increased by about three days and two days, respectively, compared with the prior week. The year-over-year decline in wait times has also narrowed to about one day, suggesting demand outside China is now roughly flat compared with last year. However, UBS Group AG said most of the weakness in the data still comes from China. UBS Group AG sees demand outside China stabilizing After a new iPhone launch, wait times are often used as an early indicator of demand relative to available supply. Longer delivery times can point to stronger orders, tighter supply, or both, while shorter wait times can suggest weaker demand. For UBS Group AG, the important change is that the gap versus last year is narrowing. According to TheFly, the firm still does not expect a significant acceleration in demand, but the latest readings show that the early picture outside China is no longer as weak. iPhone 18 Pro is kicking off its sales cycle Apple Inc. unveiled the iPhone 18 Pro and Pro Max on Sept. 9, opened preorders on Sept. 12, and began sales on Sept. 18 in more than 65 countries and regions, including China and the United States. The new Pro models feature Apple Inc.'s A20 Pro chip, a 48-megapixel main camera with variable aperture, upgraded battery performance, and Siri artificial intelligence features powered by iOS 27. Apple Inc. said the Pro Max delivers the "biggest battery life improvement" ever on an iPhone. This means UBS Group AG's readings capture only the earliest stage of the launch, and wait-time and channel data over the coming weeks will be crucial in determining whether the initial improvement can be sustained. Evercore is bullish on a stronger replacement cycle Analysts remain divided on Apple Inc. shares. UBS Group AG sees downside for the stock, while Evercore ISI last week raised its Apple Inc. price target to $380 from $365 while maintaining an "Outperform" rating. The firm's annual survey of nearly 4,000 consumers showed this iPhone cycle could perform better than expected. Evercore said shipment demand behind the new model launch could perform well and, "critically," believes pricing could rise by more than 20%. As a result, the two reports point to different signals: UBS Group AG is focused on real-time delivery and wait-time data, which remain weak in China; Evercore is relying on consumer purchase intent and sees substantial upside in both shipments and pricing. China weakness would mark a reversal from Apple Inc.'s prior quarter The early iPhone 18 data is worth watching because Apple Inc. performed strongly in China in its most recent reported quarter. In the third quarter of fiscal 2026 (Q3), Apple Inc.'s Greater China revenue rose to $18.82 billion from $15.37 billion a year earlier, an increase of about 22.4%; total iPhone revenue rose to $54.25 billion from $44.58 billion, up about 21.7% year over year. Apple Inc. also set records for company revenue and iPhone revenue in the June quarter, with total sales rising 16% year over year to $109.4 billion; the company posted double-digit revenue growth in iPhone, Mac, and Services, as well as in all geographic segments. The question now is whether the iPhone 18 can carry that momentum into the new product cycle. UBS Group AG sees early improvement but remains cautious, especially in the China market, while Evercore believes the latest launch could support a stronger-than-expected replacement cycle.