Morgan Stanley analyst Erik Woodring has revealed that the bank had cut its price target for Apple on March 12 to $252 from $275. He argued that it was caused by delays in the circulation of an advanced Siri that was expected to drive iPhone upgrades in fiscal year 2026.
Apple’s share price plummeted in early Wednesday trading after the American bank overhauled its price target on the tech company. The firm’s shares were marked 0.1% lower in premarket trading to indicate an opening bell price of $220.14 each.
Morgan Stanley cuts Apple’s price target this year
$AAPL Apple price target lowered to $252 from $275 at Morgan Stanley keeps an Overweight rating
— The Inner Circle Trading Group DP David Prince (@epictrades1) March 12, 2025
American multinational investment bank Morgan Stanley has reduced Apple’s price targets from $275 to $252 in 2025. The bank’s analyst Morgan Woodring said that the unrealized rollout of Apple’s advanced Siri, which was expected to drive iPhone upgrades in fiscal year 2026, led the firm to cut price targets.
“The postponement of an advanced Siri integrated into Apple Intelligence is likely to temper (next twelve month) iPhone upgrade rates vs. our prior expectations.”
-Morgan Stanley.
The investment bank has reduced its iPhone shipment forecast for 2025 to 230 million units (flat year-over-year) and for 2026 to 243 million (+6% year-over-year).
Woodring believes that Apple’s slower iPhone replacement cycle will likely impact its earnings this year. He projected $436 billion in Apple’s revenue and $8.00 in EPS for FY26, which was 1-2% below consensus estimates.
The analyst noted their key concern was a delayed Siri upgrade that could significantly weaken AI-driven upgrade demand. Morgan Stanley’s November 2024 AlphaWise Smartphone survey revealed that “access to advanced AI features” ranked among the top five drivers for smartphone upgrades. The survey also found that an upgraded Siri was the most desired AI feature among prospective iPhone buyers.
Woodring noted that ~50% of iPhone owners who didn’t upgrade to an iPhone 16 maintained that the delayed Apple Intelligence rollout impacted their decision not to upgrade.
Morgan Stanley’s Head of U.S. IT Hardware Research also acknowledged that tariff-related cost pressures were weighing on Apple’s outlook. The analyst highlighted that they were incorporating $2 billion of higher product input costs in 2025 to account for China’s tariffs. The bank still expects Apple to mitigate some of the $2 billion of higher product impact costs this year.
Morgan Stanley believes that AI, a redesigned iPhone 17, and improved goal distribution could help drive Apple’s upgrades in FY26. The firm still argues that a more advanced Siri is unlikely to be available until after the iPhone 17 launch, tempering expectations for an accelerated iPhone replacement cycle.
AAPL shares plummeted more than 15% from their record peak in mid-December. The tech firm has lost nearly $600 billion in value amid investors’ concerns over the slower-than-expected demand for its new iPhone 16 and mixed reception for its new Apple Intelligence AI rollout.
Apple’s iPhone sales have also experienced slow revenues over the past year, with its December-quarter revenues plummeting 0.8% to $69.14 billion. The company’s finance chief, Kevan Prekh, cautioned that current-quarter revenue would likely surge in the low- to mid-single-digits percent compared to 2024.
Investor concerns were elevated last week when it was reported that the tech company would delay updates to its Siri digital assistant. Apple’s CEO Tim Cook also added to the delays after revealing that he could be looking to make changes in the leadership of the firm’s AI division.
The tech company acknowledged last month that it would pair with its key supplier to build an AI-focused data center in Texas. The move was part of a broader plan to spend more than $500 billion in the U.S. over the next four years.
The spending plan will include purchases from Apple suppliers, media production for its Apple TV+ division and other infrastructure tied to its Apple Intelligence rollout. The company did not fully reveal the amount of new spending included in its $500 billion plan, which nears a third of its annual revenue when spread over the four-year period.
Apple’s main iPhone assembler Hai Precision (Foxconn) acknowledged it will assist in constructing the 250,000-square-foot data center in the Houston area. The data center is projected to house servers that support Apple Intelligence and is expected to be completed by 2026.
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