According to analysts from Morgan Stanley, Apple (AAPL, Financial) is expected to exceed market expectations for its third-quarter financial results, despite facing changes in tariff policies. The company's revenue is projected to increase by 5.8% year-over-year, reaching $90.7 billion, buoyed by strong product sales and favorable exchange rates.
Morgan Stanley has raised its forecasts for iPhone sales, noting both shipment volumes and average selling prices are outperforming market consensus. The sales estimates for iPads and Macs have also been adjusted upwards, with expected annual growth rates of 9% and 1%, respectively.
While investors were initially concerned about Apple's lack of guidance in the Services segment and uncertainties following an App Store ban, Morgan Stanley remains optimistic, forecasting an 11.6% annual growth in service revenue for the eighth consecutive quarter over 10%. The App Store's growth rate is also estimated at 11.6%.
Looking ahead to the fourth quarter, Morgan Stanley anticipates sustained growth, adjusting revenue estimates from $95.7 billion to $96.5 billion and earnings per share from $1.56 to $1.61. Despite a $1.5 billion tariff cost, the impact is deemed manageable.
The firm also advises caution regarding expectations for Apple's AI developments but maintains an "Overweight" rating with a target price of $235 per share.
