Morgan Stanley predicts a strong Q1 2026 for Apple, driven by high demand for the iPhone 17. Analysts anticipate revenue of $139.5 billion, a 12.3% year-over-year increase, and earnings per share of $2.70. This positive outlook follows CEO Tim Cook's previous expectations of a record-breaking quarter, fueled by the iPhone 17's anticipated success.

Strong iPhone 17 shipments are the key to this forecast. Morgan Stanley's supply chain checks point to robust shipments during the December and March quarters. This includes what appears to be above-seasonal March quarter build orders, further supporting the bullish outlook. The firm believes the iPhone 17 will be a standout product for Apple.

However, the report also acknowledges the looming challenge of memory shortages. While Apple is expected to navigate the current quarter, rising NAND and DRAM prices could impact future product forecasts. Morgan Stanley suggests potential price increases for the iPhone 18 to offset these costs. Despite this, the firm maintains a positive outlook.

Historically, Morgan Stanley has been optimistic about Apple's performance. The firm maintains a price target of $315 for Apple and rates the stock as "Overweight." Investors will be watching closely to see if the iPhone 17 delivers on these high expectations and if Apple can effectively manage the memory supply chain issue.