Morningstar

Apple: With Launch of Foldable iPhone Duo, Things Look Twice as Nice

We’ve raised our fair value estimate of Apple stock.

The Apple logo is visible on the water curtain glass facade.
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Securities in This Article
Apple Inc
(AAPL)

Key Morningstar Metrics for Apple

  • Fair Value Estimate
    : $290.00
  • Morningstar Rating
    : ★★
  • Morningstar Economic Moat Rating
    : Wide
  • Morningstar Uncertainty Rating
    : Medium

Apple AAPL unveiled the iPhone Duo, its first foldable smartphone, at its Sept. 9, 2026, event. The firm also announced the iPhone 18 Pro, the Apple Watch Series 12 and Apple Watch Ultra 4, and AirPods 5.

Why it matters: We like the Duo and expect it to be a low-volume, premium product. The starting price of $1,999 amplifies our expectations for Apple to see strong, pricing-led growth in fiscal 2027 for iPhone.

  • This was the first event with new CEO John Ternus at the helm. We liked his immediate emphasis on AI, with Apple (primarily with iPhone) as the central device hub for personal AI. We believe Apple is doing well to carve out its niche in AI, focusing on device interaction and personalized services.
  • The iPhone 18 Pro looks largely evolutionary, with expected but positive updates to the chip, camera, and battery life. We expect a larger redesign for Apple’s flagship next year, marking the 20th anniversary of the original iPhone launch.

The bottom line: We raise our fair value estimate for wide-moat Apple to $290 per share from $285, behind slightly higher pricing assumptions now including the Duo. Shares were mostly flat intraday, indicating the releases fit market expectations. Shares remain lightly overvalued to us.

  • Apple has raised prices in response to memory inflation. We see inelastic demand for the firm, and we expect flat volumes in fiscal 2027 with double-digit pricing growth. The $1,999 starting Duo price isn’t as high as some feared and aligns with our view of low-volume destruction from price.
  • Gross margin is the key debate with memory costs and pricing increases. We see Apple sharing the pain and expect more than 100 basis points of gross margin compression in fiscal 2027. We expect Apple to recoup margin in 2028, as we believe memory prices will ease as supply increases.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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