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Morgan Stanley expects Apple’s earnings to beat expectations

MacDailyNews

Jan 27

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Consensus estimates project Apple to report approximately $138.4 billion in revenue for the December quarter (fiscal Q1 2026), along with both GAAP and non-GAAP earnings per share (EPS) of around $2.67. These figures reflect at least 11% year-over-year growth in both revenue and EPS.

However, analysts have recently become more cautious on margins, adjusting forecasts downward despite positive momentum in iPhone sales and Apple’s AI initiatives.

In a client note, Morgan Stanley analyst Erik Woodring expressed confidence that Apple will surpass expectations, primarily due to stronger and more sustained demand for the iPhone. Citing supply-chain data and shipment checks, Woodring forecasts December-quarter revenue of $139.8 billion, with the iPhone contributing $80.2 billion, and services totaling $29.9 billion.

Aparajita Chatterjee for The Street:
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He said iPhone 17’s “strength remains underappreciated by the Street.”
Morgan Stanley sees cost assumptions as overly optimistic. The firm forecasts March-quarter operating expenses about 7% above consensus and a gross margin forecast 30 basis points below consensus, driven by rising memory costs…
All things considered, Morgan Stanley believes Apple is positioned to outperform in 2026 as a wave of new products and AI-driven catalysts is set to shape the company’s growth trajectory. The firm particularly highlighted the relaunch of Siri in February and Apple Intelligence in June at Apple’s Worldwide Developers’ Conference (WWDC).
Some notable introductions expected include its most “innovative iPhone in 10+ years (Foldable)“, plus the first smartphone powered by 2-nanometer chips, part of the iPhone 18 family.
The firm sees greater benefits from share gains and higher average selling prices, with Morgan Stanley underscoring an EPS of $9.77 for FY2027, roughly 7% above Wall Street consensus.

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MacDailyNews Take: Apple and, indeed, the entire U.S. economy, are primed to roar in 2026!

MacDailyNews Note: As usual, we’ll bring you Apple’s results as soon as they are released, right around 1:30 p.m. PT / 4:30 p.m. ET on Thursday, January 29, 2026 and then follow with live notes from Apple’s conference call at 2:00 p.m. PT / 5:00 p.m. ET.

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