Apple's iPhone 16 sparks demand discussion, Morgan Stanley: Any price drop will be bought on dips
The release of the latest iPhone 16 by Apple has sparked discussions about pre-order demand. Analysts at Morgan Stanley believe that the drop in stock price will attract buyers, while analysts at Barclays express concerns about the pre-order volume in the Chinese market, giving Apple's stock a "underweight" rating. Despite the possibility of demand falling short of expectations in the short term, analysts at Morgan Stanley remain optimistic about Apple's stock, believing that current demand data cannot accurately reflect future trends
Apple (AAPL.US) latest release of the iPhone has once again sparked discussions about pre-order demand since September. An analyst from Morgan Stanley stated that investors need to ignore these "noises".
According to the Securities Times app, Apple officially unveiled the highly anticipated iPhone 16 during the Glowtime online live event last week. Prior to the event, Wall Street analysts were optimistic about the upgrade demand for this new iPhone, especially because users were hoping to gain new generative artificial intelligence software features through the upgrade. However, the event left Wall Street feeling underwhelmed. From then until the close of trading on Tuesday, Apple's stock price fell by 1.9%.
One concern for investors is the global rollout schedule for Apple's AI updates. The company stated that the American English version of Apple Intelligence will be released in October, while localized English versions will be launched in some countries in December, with language versions such as Chinese, French, and Spanish set to be released next year.
Due to the time needed for these updates to be promoted in global markets, competition from other smartphone manufacturers, and the ongoing economic pressures faced by consumers, some analysts believe that the demand for the new iPhone in the short term may be lower than expected.
Barclays analyst Tim Long wrote in a research report on Monday that pre-orders for the iPhone 16 in the Chinese market have declined compared to the same period last year. Long gave Apple stock an "underweight" rating and set a target price of $186.
Morgan Stanley analyst Erik Woodring, on the other hand, gave Apple stock an "overweight" rating and set a target price of $273. In his report on Wednesday, he pointed out that the current iPhone demand data may not reflect future demand, believing that it is too early to judge the iPhone shipment volume for the next 12 months. He wrote, "The delivery time of the iPhone 16 is shorter than last year at this early stage, but as a proxy indicator of demand, delivery time does not have strong predictive power. Changes in delivery time in the next 10 days are more important."
Rather than focusing on the short-term upgrade cycle of the iPhone 16, Woodring is more optimistic about future smart devices. He stated, "Considering that most investors bullish on Apple (including ourselves) believe that the 2026 fiscal year and iPhone 17 are the bigger cycles - the delivery time data for iPhone 16 in the short term has little impact on this view - we believe that any valuation downgrade or short-term underperformance will be bought on dips, leading to a brief downturn period, after which investors will shift their focus to the profit potential of iPhone 17 and the 2026 fiscal year, which is also the basis for our $273 target price."
On Wednesday, Apple's stock price rose by 1.8% to reach $220.73, while the S&P 500 index remained nearly flat. Apple's stock price has risen by approximately 15% year-to-date