Speculation has been rife regarding Apple‘s potential acquisition of an AI search company,such as Perplexity,to bolster its standing in the artificial intelligence landscape. Tho, Morgan Stanley expresses skepticism about this strategy, deeming it “misguided.”
In a recent investor note, Morgan stanley analyst Erik Woodring asserted that acquiring an AI search engine is not the correct path for Apple, as the company’s objective is not to compete directly in the search market. The note acknowledges Apple’s current challenges in this domain, emphasizing that while significant advancements in Apple Intelligence features are not anticipated in the immediate September quarter, the company’s long-term strategy hinges on its ability to leverage AI-driven functionalities.
Morgan Stanley Projects Strong Q3 Performance for Apple
Apple is scheduled to announce its fiscal Q3 2025 earnings results on July 31.Morgan stanley anticipates a robust performance, with expectations of strong sales across both hardware and services. The firm has revised its revenue forecast for the quarter upwards to $90.7 billion, representing a 5.8% year-over-year increase. This upward revision is attributed to stronger-than-anticipated iPhone shipments,higher average selling prices,and sustained sales momentum for iPads and Macs.
Services are also projected to be a significant contributor to Apple’s financial results, despite recent investor concerns stemming from the App Store injunction and Apple’s decision not to provide guidance in its previous earnings call.Morgan Stanley observes no indicators of a slowdown in this segment, forecasting an 11.6% year-over-year growth in Services revenue.
Woodring has reiterated his “Overweight” rating for Apple stock, signifying his belief that the stock is poised to outperform the broader market. He has set a price target of $235, surpassing the recent price targets issued by HSBC ($220) and JPMorgan ($230).
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