Tim CookSource: Apple

What you need to know

  • Morgan Stanley has raised its AAPL target price to $368 per share.
  • That's a whopping $72 increase.
  • Firm Nomura also raised expectations but cautioned against inflated iPhone 12 predictions.

Morgan Stanely and Nomura have both raised their AAPL target stock prices as Apple's financial fortunes continue to roll.

According to a CNBC report:

Morgan Stanley and Nomura analysts on Friday raised their price targets for Apple stock as the tech giant's shares continue to surge. However, the latter cautioned that inflated iPhone 12 expectations "may make the music stop" and questioned market enthusiasm about a "5G supercycle." In analyst notes published early on Friday, Morgan Stanley increased its price target for Apple from $296 per share to $368 per share while Nomura lifted its projection from $225 per share to $280 per share.

MS claims that Apple will continue to outperform competitors based on peaking smartphone replacement cycles and the introduction of 5G. They claim that the iPhone replacement cycle is more like four years, rather than two, thanks to the move to installment plans and the slowing pace of innovation in the sector.

"However, longer battery life and upcoming 5G technology which will enable new functionality like Augmented Reality combined with aggressive trade-in offers that subsidize upgrades for existing iPhone owners suggest replacement cycles can't stretch much further and may in fact begin to shrink."

Firm Nomura also raised its AAPL target price to a much more conservative $280 per share, however that's still a huge jump from its previous projection of $225. They believe anticipation of a 5G iPhone supercycle may be misguided, mostly because increase costs in materials for the 5G iPhone may dent potential profits. Apple, according to Nomura, has reportedly ordered between 75 and 85 million iPhones for the second half of 2020, 10% more than it did for iPhone 11.