Apple Inc (NASDAQ:AAPL) shares are falling Monday on an analyst downgrade and concerns about the company’s iPhone supply chain. A leading Apple expert says investors should focus on price increases and AI and not the supply chain.
• Apple stock is showing weakness. What’s pulling AAPL shares down?
Gene Munster Defends Apple
Ahead of the start of 2026, Deepwater Asset Management Managing Partner Gene Munster predicted Apple would be the best performing Magnificent Seven stock in the first half of the year. While that title ultimately went to Alphabet, Apple stock hit new all-time highs in July and is up double-digit percentage on the year.
Apple’s stock momentum could take a breather with a Jefferies downgrade if the stock to Underperform and lowering the price target to $264 on Monday.
Munster is doubling down on his bullishness for Apple stock and thinks the downgrade misses the mark.
“I’m feeling good about it,” Munster told CNBC of Apple stock going forward.
Munster said that Apple’s guidance for the September quarter (fourth quarter) was better than initial estimates and the upgrade cycle is likely to see more high-end iPhones get upgraded.
The investors said Apple is likely to shift part of its product cycle to the next quarter, which could mean that consumers looking to upgrade have to buy the higher priced models, helping boost average sale prices of the iPhone 18.
“You get some more juice out of September.”
Munster said the iPhone remains core to the Apple story, but there are other x-factors such as the next Siri.
“There’s going to be a massive upgrade cycle around consumer hardware that’s probably going to start ’27.”
Munster said that upgrade cycle could go on for a few years and see companies such as Apple that offer personalized AI for a device benefit.
“I think shares are undervalued.”
Hitting on the comment from Jefferies about supply chain and costs, Munster said investors haven’t see iPhone prices yet, but they’re likely to be 15% higher.
While this could take the average selling price from $850 to $975, Munster said the majority of people who buy an iPhone do so on a subscription basis either through Apple or their cellphone company, meaning only a couple dollars more per month.
“I wouldn’t focus too much on what could happen on the supply chain on memory. Focus more on the price increases.”
While Apple will eat some of the costs, other costs will be passed onto consumers, and the larger sales of higher-priced models could help with margins and offset weak Street expectations, Munster said.
Apple Keeps Beating Estimates
Apple reported third-quarter financials results on July 30. The company beat analyst estimates for both revenue and earnings per share for a 14th straight time.
Revenue was up 16% year-over-year to mark the strongest June quarter ever.
The technology giant continues to set quarterly records for overall revenue, iPhone revenue and installed base of active devices.
Expectations for the September quarter (fourth quarter) could come in lower than estimates for past quarters based on minimal details for the iPhone 18. The fourth quarter could see stronger-than-expected results and set up for a strong 2027 based on Munster’s take on the iPhone 18 along with other x-factors like the AI growth for the company.
Apple Stock Price Action
Apple stock is down 2% to $306.93 on Monday versus a 52-week trading range of $223.78 to $344.57. Apple shares are up 13.4% year-to-date in 2026.
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