Jim Cramer sees a huge catalyst on the horizon for Apple. How to play the stock
Keep your bat on your shoulder and be ready to swing if Apple shares wobble ahead of this month’s foldable iPhone release, Jim Cramer said Thursday. The simple reason to be on alert: Wall Street may be underestimating the importance of the iPhone Duo to the company’s financial and stock performance. Jim said that includes analysts at Morgan Stanley, who cut their price target on Apple shares Thursday on a belief that the company’s new iPhone lineup won’t deliver a ton of upside to their profit estimates. “After this guy has knocked [the stock] down, if you don’t own any Apple, buy it ahead of the Duo,” Jim said on Thursday’s Morning Meeting . Shares are down about 1% Thursday afternoon, to roughly $329 apiece. After touching a fresh 52-week high of $345.34 on Sept. 22, the stock is off over 4%. Apple’s first foldable device — unveiled at its annual fall hardware event on Sept. 9 — becomes available for preorder on Oct.16, before its official release on Oct. 23. Starting at $1,999 and available in both a star white and night sky color, Apple touts the phone as having the largest ever display of the iPhone product line. The company also says the phone is sleek and compact enough to easily fit in your pocket. When closed, it’s about the size of a passport. Since previewing it himself at Apple’s flagship New York store on Sept. 18, Jim believes the Duo is a game-changer for the investment narrative. He acknowledged the new models of the fold-free iPhone — the iPhone 18 Pro and Pro Max — may not be blockbusters in the way that last year’s iPhone 17 crushed consensus expectations. This is the first iPhone launch under CEO John Ternus, who succeeded veteran boss Tim Cook on Sept. 1. “The [iPhone Duo] is what’s going to move this stock,” Jim said earlier Thursday on CNBC. AAPL YTD mountain Apple’s year-to-date stock performance. Morgan Stanley, on the other hand, thinks it will be tougher for Apple shares to realize significant outperformance following a strong run in the last six months. The stock is up over 28% in that period. The firm maintained a buy-equivalent rating, but slightly cut its price target by $5 to $355 per share. “The next 2+ years of product innovation under new CEO John Ternus are amongst the more exciting, and consequential, we can remember in recent history,” the analysts wrote. The firm expects Apple to deliver four consecutive years of iPhone unit growth for the first time since fiscal 2015, with earnings per share compounding at approximately 13% between fiscal years 2026 and 2028. Apple’s fiscal 2027 began on Sunday. “But as we digest what we learned since the iPhone launch, including pricing, specifications, lead times, Siri AI, Services pricing actions, and supply chain checks, we walk away with a model that is little changed from pre-launch,” analysts said. The firm modestly raised its revenue estimates, citing stronger iPhone production, and potential upside in Mac and Services pricing. However, lower-than-expected average selling prices for the new iPhones and rising memory costs largely offset those gains, leaving the EPS outlook for fiscal year 2027 and fiscal year 2028 broadly unchanged.In the U.S., the iPhone 18 Pro starts at $1,199, up $100 from the iPhone 17 Pro entry price. The iPhone 18 Pro Max begins at $1,299, also a $100 hike from the prior year. In addition to introducing the foldable mode, another notable thing about Apple’s iPhone lineup this fall is the absence of a base model . There’s only the premium Pro and Pro Max on the market, for now. The company is expected to introduce the standard iPhone 18 in the spring. Jim did not dispute Morgan Stanley’s research, but argued the firm isn’t giving enough weight to the iPhone Duo’s long-term promise. “There are only five mentions of the Duo in [the Morgan Stanley] piece. Five! The Duo is revolutionary,” Jim said, suggesting that Morgan Stanley is allowing the iPhone Duo’s limited first-year supply to overshadow the future growth opportunity. Though the analysts say the device might become an “increasingly important contributor to future upgrade cycles,” they expect its near-term financial impact to be relatively modest, projecting that up to 20 million units will be produced during its first cycle, bringing in $43 billion in fiscal 2027 revenue, making up only 14% of the firm’s total projected iPhone sales of $301.9 billion for that year. When Jim was at the iPhone 18 launch event in New York, he said he asked CEO Ternus whether company would have enough Duos to meet demand. Ternus said he thinks so. Despite the constraints pointed out by Morgan Stanley, Jim said Thursday that investors should not overlook the tech giant. He quipped, “The Duo will not have five mentions in the next piece you read from Morgan Stanley.” (Jim Cramer’s Charitable Trust is long APPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
