Apple faces valuation test as five iPhone models loom

A report this week indicates Apple plans to launch at least five iPhone models across late 2026 and early 2027 and has raised its foldable iPhone production target to about 10 million units.

The schedule would extend new-model introductions into the first half of 2027 and represent one of Apple’s busiest iPhone cycles in years. The higher foldable target would place Apple alongside Samsung and Huawei in the foldable market.

Analysts at Morgan Stanley outline a scenario in which foldables and AI-related demand push iPhone shipments above 250 million in fiscal 2027; their bull-case valuation reaches $376 per share.

Market reactions are mixed. Jefferies downgraded Apple to Underperform, citing what it called unrealistic expectations around upcoming models and the upgrade cycle. KGI Securities cut its rating to Hold from Outperform and set a $315 price target. TD Cowen raised its target to $350 and maintained a Buy rating. Maxim Group increased its target to $350; Maxim analyst Tom Forte described Apple’s recent developer presentation as showing “meaningful improvements” in AI work that could support both services and hardware sales.

Rising memory costs are a central concern. Demand for DRAM and NAND from AI data centers has tightened supply and pushed prices higher. JPMorgan data indicate memory could account for about 45% of iPhone production costs by 2027, making the iPhone cost structure more sensitive to market swings.

Apple faces two basic choices: absorb higher component costs and accept pressure on gross margins, or pass a larger share of costs to customers and risk slower upgrade rates. In June, Apple raised prices on some Mac and iPad models and other products in response to higher component costs.

After the June price increases, Apple shares fell 6.12% to $275.15 on June 25. Upcoming product announcements and supply-chain updates in the months ahead will provide further data points for investors assessing demand, margins and valuation.