Improved Siri’s late arrival will weigh on Apple stock, says Morgan Stanley
A noted analyst has slashed his expectation for Apple stock by about 10% given what he sees to be slower iPhone upgrade rates because of tariffs, and a delayed Siri with Apple Intelligence rollout.
In a note to investors written by Morgan Stanley’s Erik Woodring, Apple’s headwinds have been re-evaluated. The most recent fears for Apple’s bottom line appear to be the postponement of Siri upgrades, higher product import costs because of Trump administration tariffs, with both leading to lower earnings per share.
While Woodring remains bullish on what may be a redesigned iPhone 17 driving sales, he’s less certain about other avenues of success. He’s decreased calendar year 2025 iPhone shipments a bit, with sales in 2025 being flat year-over-year, as opposed to an increase.
The analyst appears to be leaning on a survey that they ran, citing “access to advanced AI features” as a driver of smartphone sales. We’re not certain how accurate this is, given survey biases for surveys like this have historically tended to be toward the higher-end of iPhone sales, versus the larger market that has generally not cared if they have the newest features or not.
Woodring feels that the upgrade cycle will continue to lengthen given Apple’s staggered — and sometimes delayed — Apple Intelligence feature roll-out. He does eventually expect a contraction, but not until the 2027-2028 cycle year, and therefore not relevant to Wednesday’s price target trim.
As far as the impact of tariffs will apply to Apple, that remains fluid. Woodring assumes that Apple will get hit by $2 billion in product costs.
He’s not clear if the company will increase prices to offset that. Given that exporting countries don’t pay the tariffs, and importing companies do, it’s not out of the question.
In the short term, Woodring believes that $200 is the absolute floor for Apple stock. The upper limit in the short term is $250 — just short of the new $252 target.
Morgan Stanley’s last price target for Apple stock was set just after earnings, at $275. Woodring said then that iOS 18.4 in April was an “important catalyst” looking forward for iPhone sales.
At the time, that update was expected to have the upgraded Siri and support for multiple languages, therefore expanding the demand for the iPhone in the newly-supported countries. The update will arrive on time, but the upgraded Siri has been delayed.
Since the January note, Apple stock has been roughly flat. It peaked at just over $247 in late February. However, increased saber-rattling about tariff applications and other factors weighing on the economy have bled off all the gains since the better-than-expected earnings.
Apple stock is down $2 on the price target decrease, and fears about the global economy as a whole.
