Apple Earnings Imminent, UBS Raises Price Target: Can Cook Deliver Stellar Results Before Stepping Down?

UBS analyst David Vogt noted in a report on April 28 that rising memory prices are squeezing Android competitors, which provides an opportunity for iPhone market share growth. He expects Apple’s results for this quarter to be "slightly ahead of expectations," with revenue of approximately $109 billion, primarily driven by iPhone and Mac demand.

However, he also warned that services growth could be lower than expected, as modest App Store growth offsets the strong performance of the payments business. UBS forecasts services revenue growth of approximately 14% and a consolidated gross margin of 48.5%, which is at the midpoint of the company's guidance range.

Unlike UBS’s cautious stance, Morgan Stanley ( MS) holds a more optimistic view. Analyst Erik Woodring stated in a report released on April 20 that both current-quarter results and next-quarter guidance could exceed market expectations, maintaining an "Overweight" rating and a $315 price target.

He believes that iPhone revenue growth is sufficient to offset the pressure of rising memory chip prices on gross margins, and that the WWDC in June and the release of a foldable iPhone in September will serve as catalysts, potentially driving the stock price to $300 by September.

The divergence between the two investment banks reflects the market's differing judgments regarding the implementation path of Apple's AI strategy.

Some analysts point out that successor John Ternus faces the challenge of how to transform Apple's AI software (including the partnership with Gemini) into a truly AI-centric device experience. Morgan Stanley, on the other hand, believes Apple will not follow competitors in aggressively investing hundreds of billions of dollars to build data centers, but will instead seek a balance between hardware iteration and services growth.

Beyond the AI narrative, Apple's actual sales performance in the end-market is also drawing significant attention, particularly its market share shifts in China—the world's largest smartphone market—and the growth momentum generated by the new MacBook Neo.

Data from Counterpoint Research indicates that while overall shipments in the Chinese smartphone market fell by 4% in the first quarter of 2026, Apple's shipments bucked the trend with a 20% increase, reaching 13.1 million units. Its market share rose to 19%, ranking second and trailing only Huawei (20%). In a report dated April 17, the firm stated that Apple holds an advantage amid memory and storage shortages due to its premium product positioning and robust supply chain management capabilities.

[Source: Counterpoint Market Monitor Tracker]

Beyond the iPhone, Apple also saw unexpected success in its Mac product line, with first-week global orders for the MacBook Neo—released in mid-March—reaching 1.2 million units, triple the first-week sales of the previous-generation MacBook Air. Apple's initial inventory planning for this product was between 5 million and 6 million units, suggesting its projections were relatively conservative.

Tim Cook stated on social media that the model set a record for the best first-week sales in Apple's history. Consequently, UBS raised its revenue forecast for Apple's third fiscal quarter of 2026 by approximately 4% to $102 billion, while also increasing its iPhone shipment forecast from 46.5 million to 50.3 million units, primarily due to memory-driven market share growth.

Rising memory prices continue to be a source of pressure on profit margins. According to TrendForce, in the first quarter of 2026, contract prices for high-performance mobile LPDDR5X DRAM surged 130% quarter-over-quarter, while NAND flash prices rose by 85% to 90%.

UBS expects the June quarter gross margin to be between 47% and 48%. Citi analysts, however, warned of approximately 140 basis points of downside risk to the gross margin.

Goldman Sachs ( GS ), conversely, holds the opposite view. Analyst Michael Ng reiterated a Buy rating and a $330 price target on April 20, forecasting second-quarter earnings per share of $2.00, which is above the consensus estimate of $1.93.

He believes the market's concerns over DRAM price hikes are somewhat overblown, and that Apple will perform well in iPhone revenue, Mac revenue, and gross margins. Goldman Sachs expects services revenue to grow by about 14% with a gross margin of 47.3%, providing a buffer against cost fluctuations.

This earnings report is unique as it coincides with a management transition period. Apple announced on April 20 that Tim Cook will step down as CEO on September 1 to serve as Executive Chairman, while John Ternus, Senior Vice President of Hardware Engineering, will succeed him as CEO.

Investment firm Melius commented that Cook is likely to exit on a high note, and that Apple chose to announce the succession plan ahead of the earnings report to keep the market focused on strong fundamentals. Ternus stated at a staff meeting that "AI will create infinite new possibilities," but the actual contribution of this vision to financial performance remains to be seen.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.