Apple's Fiscal Q1 Outlook Shows Product Strength, Services Weakness, Morgan Stanley Says

10:50 AM EST, 11/03/2026 (MT Newswires) -- Apple's (AAPL) "better than expected" fiscal Q1 revenue outlook points to solid underlying product demand and pricing power, though weaker Services growth and gross margins remain key concerns, Morgan Stanley said in a Tuesday note. The investment bank said Apple's guided 7% to 10% year-over-year revenue growth for the December quarter came in above Wall Street expectations despite "supply constraints," with iPhone and Mac likely to remain the company's "strongest product portfolios." Still, Services growth is expected to slow to 8% to 9% as App Store and third-party "licensing headwinds persist," while "higher memory costs" and AI-related expenses pressure margins, the note said, adding that Services re-acceleration now becomes "key." Morgan Stanley maintained an overweight rating on Apple but cut its price target to $350 from $355, saying it remains in the "constructive camp" on Apple, citing stability and free cash flow predictability. Price: 329.48, Change: -8.84, Percent Change: -2.61