While the iPhone 17 upgrade cycle has been moderate, investment bank Morgan Stanley sees promising signals for the upcoming iPhone 18.

From concern to confidence

In March 2025, Morgan Stanley lowered Apple’s target share price to USD 252, fearing weak demand for the iPhone 17 series.

However, in its latest investor report, as cited by AppleInsider, the firm’s analysts say real-world demand has exceeded expectations and point to strong potential for continued growth.

Specifically, supply chain surveys reveal that Apple has yet to ramp up iPhone production, but that is expected to change in the near future.

Sources from suppliers indicate that for the remainder of 2025, Apple will increase iPhone 17 orders from 84–86 million units to over 90 million.

According to Morgan Stanley, this rise in orders is largely driven by the iPhone 17 Pro and iPhone 17 Pro Max - two high-end models expected to sustain sales momentum. This uptick is also set to offset weaker-than-expected demand for the iPhone Air.

Although the iPhone 17 line has seen only modest growth, analysts argue this is a conservative assessment, as early demand remains strong.

iPhone 18 to trigger a boom, foldable iPhone is the ace

Interestingly, Morgan Stanley suggests that the stability of the iPhone 17 line is raising expectations for the iPhone 18's appeal.

The reason is that a large portion of users still rely on older iPhones, now considered outdated.

According to projections, by 2026 more users will fall into this category, likely triggering a strong upgrade cycle centered on the iPhone 18.

Morgan Stanley forecasts Apple will release six iPhone models in 2026, including: the budget iPhone 17e, standard iPhone 18, iPhone Air, foldable iPhone Fold, and the premium iPhone 18 Pro and iPhone 18 Pro Max.

Among them, the iPhone Fold - Apple’s first foldable screen model - is expected to be the breakout star, potentially driving a significant spike in global sales.

The firm currently estimates that Apple will sell a total of 243 million iPhones in 2026.

However, under its most optimistic scenario - if the iPhone Fold becomes a global sensation and Apple Intelligence (Apple's next-generation AI capabilities) gains major traction - sales could climb to 270 million units.

In such a case, Apple’s stock (AAPL) could reach a target price of USD 376, a remarkable increase from current levels.

Strategic advantages and partnerships support the vision

Beyond demand forecasts, Morgan Stanley remains confident in Apple’s ability to navigate external challenges.

The bank was one of the few to correctly predict Apple would continue its search engine deal with Google - a key source of service revenue.

Additionally, Morgan Stanley believes Apple is actively addressing tariff and geopolitical issues, reinforcing its supply chain and preserving market share.

Once pessimistic about the iPhone 17, Morgan Stanley has now become one of the most optimistic voices regarding Apple’s future.

With the anticipated iPhone 18 and iPhone Fold, Apple is poised for a powerful growth cycle in 2026.

Still, analysts caution that success hinges on two key factors: the real-world appeal of the foldable iPhone and Apple’s ability to leverage Apple Intelligence to deliver AI-driven features that set it apart from competitors.

In an era of increasingly demanding users, Apple must prove that the iPhone 18 is more than a standard upgrade - it must signal the beginning of a new iPhone era.

Hai Phong