JPMorgan raised its price target on Apple (NASDAQ: AAPL) to $315 from $305 while maintaining an Overweight rating, citing an improving risk-reward profile ahead of upcoming earnings.
The firm noted that Apple shares had underperformed the S&P 500 over the prior two months, falling 13% versus a 1% gain for the broader index. JPMorgan said the underperformance reflected investor concerns around gross margin pressure from sharply rising memory costs, potential price elasticity risks for iPhone demand, and modest softness in recent App Store Services data, despite positive indicators pointing to strong iPhone 17 demand.
JPMorgan said it saw a constructive setup heading into Apple’s fiscal first-quarter 2026 results, with the stock trading at roughly 30 times next-twelve-month earnings, below the peak multiple historically observed ahead of major iPhone product cycles. The firm cited prior peaks of approximately 32 times earnings during the 5G upgrade cycle.
The analysts expected iPhone revenue to exceed consensus forecasts, with projected 16% year-over-year growth placing Apple on track for its strongest iPhone revenue expansion since September 2021. On Services, JPMorgan projected App Store revenue growth of about 7% year over year in fiscal Q1, below Apple’s overall Services growth guidance of roughly 14%. However, the firm said Apple had multiple non-App Store levers to support Services growth, pointing to fiscal Q4 2025 when total Services rose more than 15% despite App Store growth estimated at just 10%.
JPMorgan also anticipated limited margin pressure from higher memory costs, citing Apple’s long-term supply contracts and scale advantages that typically deliver more favorable component pricing than peers. Volume and revenue upside were expected to further support gross margin leverage. Operating expenses were forecast to come in below guidance in fiscal Q1, as fees related to access to foundational Gemini models were expected to ramp in fiscal Q2 rather than the December quarter.
Based on these factors, JPMorgan forecast a modest revenue beat and a stronger earnings beat in fiscal Q1, followed by a fiscal Q2 outlook calling for 10%–12% revenue growth. The higher price target reflected increased earnings power and a valuation multiple more consistent with historical peaks ahead of major product cycles later in the year.
