There’s been no scarcity of rumors about Apple’s supposed intentions of buying an AI search firm, resembling Perplexity, to assist it catch up within the AI race. And whereas many appear to agree that this could be a minimum of a partial resolution to Apple’s issues, Morgan Stanley isn’t that satisfied.
In an investor notice printed right now (through AppleInsider), Morgan Stanley analyst Erik Woodring states that it’s “misguided” to suppose that Apple ought to purchase an AI search engine, as it isn’t the corporate’s intention to compete within the search market.
The notice acknowledges Apple’s struggles on this area, and states that whereas the September quarter may also not convey many Apple Intelligence-related updates, Apple’s capacity to capitalize on AI-driven options stays a long-term play.
A constructive outlook on the upcoming fiscal Q3 report
Apple is about to launch its fiscal Q3 2025 earnings outcomes on July 31. Morgan Stanley expects them to point out stable efficiency throughout {hardware} and companies.
The agency has raised its income forecast for the quarter to $90.7 billion, up 5.8% year-over-year, citing stronger-than-expected iPhone shipments, increased common promoting costs, and continued energy in iPad and Mac gross sales.
Providers are additionally anticipated to be a spotlight, regardless of investor considerations from the current App Retailer injunction, added to Apple’s resolution to not concern steerage throughout its final earnings name. Morgan Stanley sees no indicators of a slowdown, and now tasks Providers income will develop 11.6% year-over-year.
Within the notice, Woodring maintains Apple’s Chubby score, that means he believes the inventory can nonetheless outperform the broader market. He set a $235 worth goal, above the current worth targets set by HSBC ($220), and JPMorgan ($230).
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