Apple's Margin Squeeze Draws Twin Target Cuts From JPMorgan and Morgan Stanley
Published on 11/03/2026 at 17:11 | Editorial boerse-global.de
Apple's holiday-quarter guidance has prompted two of Wall Street's biggest bulls to trim their price targets — though neither has abandoned its positive stance on the stock.
JPMorgan lowered its target to $355 from $360 on Thursday while keeping an "Overweight" rating, citing concerns about growth in the services business and gross margins. Morgan Stanley followed with a cut to $350 from $355, also maintaining "Overweight." Not every revision went the same way: a third research house raised its target to $295 from $270, while sticking with a neutral rating.
At the root of the margin anxiety is Apple's outlook, released Wednesday. The company guided to a gross margin of 45% to 46% for the December quarter, below analyst expectations, with management flagging rising memory costs and spending on Siri AI as drags. Memory costs are expected to keep climbing beyond December, according to the company. On the top line, Apple projected revenue growth of 7% to 10% year over year for the December quarter.
The services segment is set to expand 8% to 9%, a pace media reports describe as a slowdown. That compares with a gross margin of 47.9% in the fourth fiscal quarter just reported — a gap that, per Reuters, drove the negative share reaction even though Apple beat expectations on both revenue and profit.
Should investors sell immediately? Or is it worth buying Apple?
A Strong Quarter Overshadowed
For the fourth fiscal quarter of 2026, Apple reported revenue of $114.5 billion, up 12% from a year earlier. Diluted earnings per share rose 14% to $2.10 on a company basis, with both figures ahead of estimates.
Investors nonetheless focused on the profitability outlook. The stock fell 2.3% in Thursday's session, having already slipped 2.8% in premarket trading as the guidance and cost commentary landed during Wednesday's conference call.
Product Rollout and a Korean Fine
Apple used late October to refresh several product lines. On October 28 it unveiled MacBooks with touchscreens for the first time, alongside new M6 versions of the MacBook Pro and iMac, with availability starting November 6. The same day brought a MacBook Pro featuring a PROLED-XDR display and tandem OLED technology, following an October 27 announcement of an M6-equipped MacBook Pro plus new AI features and creative tools for Apple Creator Studio. A revamped iPad mini, introduced October 26, gains an 8.5-inch OLED display and Siri AI, with availability beginning November 6, 2026.
Apple at a turning point? This analysis reveals what investors need to know now.
Regulatory pressure surfaced in Asia on October 28 as well: South Korea's media and communications commission fined Apple 20.8 billion won over its app payment practices and ordered corrective measures.
Shareholders, meanwhile, have a dividend of $0.27 per share to look forward to, payable November 16 to holders of record as of November 12.
Ad
Apple Stock: New Analysis - 3 November
Fresh Apple information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
