Apple delivered strong earnings results on Thursday, boosting expectations that the stock has much more room to run even as rising memory costs put pressure on the iPhone maker’s profitability. The “Magnificent Seven” name posted $111.18 billion in revenue for the second fiscal quarter, better than the $109.66 billion forecast. The sales total included a lower-than-expected $56.99 billion from iPhone sales, compared to the $57.21 billion expected by analysts polled by LSEG. Mac and iPad revenue were both better than expected. Earnings came in at $2.01 per share, or above the Street’s consensus estimate of $1.95 per share. The company also forecast that revenue in the June quarter will increase between 14% and 17% from a year earlier. Analysts had predicted 9.5% to $103 billion for the same period, LSEG data shows. Apple stock rose nearly 4% in premarket trading Friday. “Results demonstrated strong iPhone, Mac, and Services momentum, along with AAPL’s ability to effectively manage cost inflation, both of which have been investor concerns,” Morgan Stanley analyst Erik Woodring said Friday in a note to clients. “Last night’s report was the clearing event Apple needed to see shares outperform into the September iPhone launch.” Morgan Stanley has an overweight rating on Apple. It also has a $330 price target on shares, implying 22% upside from Thursday’s close. Shares have traded flat in the year to date, underperforming the overall market as investors express doubts that Apple can pull off its ambitious push into artificial intelligence, particularly amid an ongoing memory supply crunch. AAPL YTD mountain Shares are trading flat in the year to date. However, Apple’s latest earnings results show that its efforts are beginning to pay off, putting it on the path to unlocking considerable growth and value creation in the long term, per Morgan Stanley. Here’s what other shops on Wall Street are saying about the “Magnificent Seven” name. Citi: buy, $315 Apple could sees upside of 16%, per analyst Atif Malik’s price target on the stock. “Macro woes and impact on consumer spending are valid concerns, but we believe Apple’s growth in [the] active installed base of products and subscriptions is sticky, and should help to drive demand in future years. The full product + software + service package is what makes Apple unique as others do not control this. We also expect to see gross margin expansion driven by higher blended ASP in iPhone sales mix, further share gain in emerging markets, continued self-design of cellular chips to reduce BOM costs, and higher margin services sales mix. New product category launches including AR/VR are not fully reflected in current estimates.” Bank of America: buy, $330 Analyst Wamsi Mohan sees 22% upside for Apple from its Thursday closing price. “We remain bullish on shares of Apple heading into the remainder of 2026 given (1) iPhone revenues are tracking better than expected (Globally including China) with record upgraders, (2) gross margins continue to show strength despite commodity headwinds, (3) AI enabled Siri will be available in 2026, (4) A foldable iPhone is expected this fall, (5) a new record installed base of 2.5+bn devices to drive continued double digit growth in Services, and (6) CEO transition in September with John Ternus to bring a focus on product launches while Tim Cook takes on Chairman role. Reiterate Buy on strong capital returns, eventual winner on AI at the edge and optionality from new products.” Barclays: underweight, $253 Analyst Tim Long’s newly raised price target on shares is TK% above Thursday’s closing price. “AAPL reported a solid quarter, and June guidance is positive. We are raising estimates for FY26, but by a lesser amount in FY27 as we are unsure about the sustainability of the strength, particularly for iPhone and in China. We remain UW as we believe the valuation is stretched given that we are still unsure of the AI strategy, and how monetization will work. We continue to see regulatory risks to the Services business as well, and expect iPhone growth to slow. (Note, we are still modeling a change in seasonality for iPhones as we expect the iPhone 18 base models to ship in March 2027 instead of the usual September launch).” JPMorgan: Overweight, $325 Samik Chatterjee, an analyst, put a price target on the stock that is 20% above its closing price on Thursday. “Apple’s results in recent quarters continue to be under a cloud of investor concerns around memory-related cost management, even though the company keeps consistently delivering upsides to gross margins by leveraging the full spectrum of available levers, including premium mix, cost reduction, and Services gross margin expansion. While those concerns may not fully dwindle until investors gain visibility into pricing for the iPhone 18 lineup, Apple continues to move the bar higher on gross margins in the interim by reporting an all-time record of 49.3% in F2Q26 (March-end) and guiding to a record F3Q26 (June-end) margin of ~48%, again ahead of investor expectations. Contrary to investor concerns, the bigger hurdle for Apple appears to be on the supply side, specifically the availability of advanced-node processors needed to keep pace with stronger-than-expected demand for iPhones, as well as incrementally for Macs following the recent surge in demand for the Mac mini, Mac Studio, and newly launched MacBook Neo.” Goldman Sachs: buy, $340 Analyst Michael Ng’s price target for Apple is 25% above the price at which shares closed on Thursday. “Results demonstrated strong iPhone, Mac, and Services momentum, along with AAPL’s ability to effectively manage cost inflation, both of which have been investor concerns, in our view… The market’s focus on slower product revenue growth masks the strength of the Apple ecosystem and associated revenue durability & visibility. Apple’s installed base growth, secular growth in services, and new product innovation should more than offset cyclical headwinds to product revenue.”
