11:28 AM EST, 01/26/2026 (MT Newswires) -- Apple ( AAPL ) faces increased near-term cost uncertainty that could weigh on margins and sentiment, though the company can benefit from a more catalyst-driven H2, Morgan Stanley said in a note Monday.

The firm said it remains "more cautious" in the near term due to a tougher setup, including memory cost headwinds which are expected to intensify.

However, Morgan Stanley said it still expects Apple ( AAPL ) to outperform in 2026, supported by the launch of better Apple ( AAPL ) intelligence features, possible introduction of a foldable iPhone, and the launch of a 2-nanometer powered iPhone 18.

Morgan Stanley said iPhone demand appears steady, with checks pointing to balanced channel inventory.

The firm models diluted EPS of $8.21 in 2026 and $9.77 in 2027.

Morgan Stanley maintained its overweight rating on Apple ( AAPL ) and its price target of $315.

Shares of Apple ( AAPL ) were up 2.8% in recent trading Monday.

Price: 254.92, Change: +6.88, Percent Change: +2.77