Apple Investors Warned Not to Get Too Excited About iPhone Demand

Apple investors are being cautioned not to get too excited about the strong demand signals heading into the next iPhone cycle. KeyBanc remains Underweight on Apple stock, with a price target of $250. Analyst Brandon Nispel argues that while spending is up, it's mostly reversing unusually weak seasonal trends from the previous three months.

The firm's monthly carrier survey showed indexed spending rising 9% in June, well ahead of the three-year average of 2%. However, Nispel called this reading relatively neutral, and notes that consumers may be pulling purchases forward ahead of Apple's expected September product launch.

KeyBanc expects higher device prices to pressure unit growth, with U.S. carrier subsidies pulling back and upgrade rates moderating. The firm forecasts Services growth slowing to 7% in fiscal 2027 versus consensus near 12%. This is a particularly important risk because Apple enters the next iPhone cycle with substantial momentum.

The valuation of Apple stock leaves little room for disappointment, with KeyBanc noting that it trades around 34 times earnings compared with a three-year average near 28 times. The next iPhone cycle may therefore become a test of price versus volume, and investors should watch upgrade rates, carrier promotions, international demand, and whether higher average selling prices compensate for softer unit growth.