Morgan Stanley is getting more optimistic on Apple inventory. “We think the Apple story could be turning the corner,” analyst Erik Woodring wrote in a Thursday word. To again this up, Woodring pointed to probably stronger-than-expected iPhone builds in China and the chance for estimates to be revised larger, which can enable the inventory’s a number of to broaden and drive shares up. Morgan Stanley’s China workforce just lately raised its iPhone builds estimate for September by 8%, saying iPhone gross sales had been stronger than anticipated within the June quarter, which implies provide will must be replenished. “These positive revisions are a result of better than expected iPhone sell-through in the June quarter, which reduced iPhone channel inventory below normalized levels, and thus created a larger channel fill opportunity in the September quarter, as the positive build revision is entirely iPhone 16 (2M units) and Pro Max (2M units) models,” he mentioned. Woodring mentioned this more upbeat forecast is baked into its estimates already, but it surely might suggest more upside forward within the December quarter, which is often more risky than the September interval. “Relative to our current 78M December quarter iPhone shipment forecast, this could imply modest iPhone shipment upside, though we’ll be able to narrow this range next month when the iPhone 17 is officially launched,” he mentioned. Apple has but to completely roll out Apple Intelligence, its full suite of synthetic intelligence integration. Functions like an up to date Siri with AI integration has been delayed a number of occasions because it was first introduced final 12 months. Apple is predicted to announce the main points of its new iPhone subsequent month. “We are turning more bullish – forward iPhone unit/revenue growth expectations are still relatively muted, many of the same factors that got us bullish last July remain (elongated replacement cycles/pent up iPhone demand, new form factors in the pipeline, structural gross margin tailwinds, etc.), we’re past peak tariff risk (Section 232 is a non-event), regulation is not as significant of a near-term headwind as feared (though remains a long-term risk), pricing is an underappreciated lever that Apple can pull for both Product and Services (Apple hasn’t raise Services prices in 2 years), and relative to the S & P, Apple is trading in-line with the trailing 5 year average,” the analyst mentioned. Apple shares have pulled again more than 7% in 2025. The analyst mentioned most establishments are literally underweight Apple in contrast with its peer megacap know-how shares. “In our view, Apple is one potential AI partnership away from breaking out,” the analyst mentioned.