Apple shares AAPL traded lower on Thursday after Morgan Stanley trimmed its price target on the iPhone maker, while investors also weighed growing concerns about the impact of agentic artificial intelligence on Apple’s business.
Apple stock was down about 0.8% in trading, compared with a 0.13% decline in the S&P 500.
The Nasdaq was nearly flat, down about 0.015%.
Morgan Stanley lowered its Apple price target to $355 from $360 while maintaining an Overweight rating.
The stock was trading at $330 per share on Thursday.
The brokerage said agentic AI represented both “a potential emerging risk” and an opportunity for the company.
Apple shares have gained about 30% over the past six months, leaving less room for further upside based solely on the company’s latest product launches, according to the firm.
Morgan Stanley said Apple’s product roadmap remains among the most exciting in more than a decade, but its earnings outlook changed little following the latest iPhone launch.
Revenue growth may not translate into earnings
Morgan Stanley modestly raised its revenue estimates after Apple’s fall product launches, citing stronger iPhone production, higher Mac revenue and pricing benefits in its Services business.
However, the brokerage expects those gains to be largely offset by lower iPhone average selling prices and higher memory costs.
The firm continues to forecast earnings per share of about $10 for fiscal 2027 and close to $11 for fiscal 2028, which would put its estimates 0% to 3% above Wall Street expectations.
Morgan Stanley said the September quarter could benefit from resilient iPhone production, stronger Mac revenue, Services pricing tailwinds and tariff refunds.
The December quarter presents a more mixed picture.
The brokerage said Street estimates have not fully incorporated the staggered iPhone launch, leaving projected iPhone shipments for the quarter potentially too high.
Meta’s AI ambitions raise ecosystem concerns
Needham also reiterated a Hold rating on Apple on Thursday, citing competitive threats from Meta Platforms and other AI-focused companies.
Analyst Laura Martin said the biggest investment risk for Apple shareholders would be Meta or another AI-first company developing an AI-agent, hardware and monetization stack capable of disintermediating the iPhone.
Such a shift could weaken the ecosystem that has supported Apple’s valuation, according to Martin.
She noted that Meta’s projected fiscal 2026 revenue of $263 billion is roughly half of Apple’s, and said the social media company aims to narrow that gap.
Martin also pointed to the long-running competitive tension between the companies following Apple’s 2021 App Tracking Transparency changes.
Meta has previously said the privacy changes reduced its advertising revenue by billions of dollars.
AI agents could reshape digital commerce
Bank of America raised a similar concern earlier this week after Apple shares declined following its analysis of Meta’s Muse AI agent.
Analyst Wamsi Mohan warned that AI agents could shift online shopping activity away from Apple’s ecosystem.
Muse can browse websites, complete forms and continue tasks after users leave the application.
It has also gained access to commerce services including Shopify, Expedia and PayPal, although Amazon has blocked the agent.
The concern is not necessarily that Apple would immediately lose device sales.
Instead, Apple could retain control of the hardware while losing some of the digital activity surrounding product discovery, referrals and transactions.
Mohan also noted that Apple’s updated Siri, built around Apple Foundation Models and Private Cloud Compute, currently lacks some of Muse’s background-task capabilities and broader third-party actions.
Bank of America nevertheless maintained its Buy rating on Apple, citing its large installed base, customer trust, and privacy-focused technology.
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