Bernstein Stays Bullish on Apple Despite Gross Margin Pressure

Analyst Mark Newman from Bernstein has reiterated his Buy rating on Apple stock (AAPL) with a price target of $370, despite flagging gross margin concerns for the December quarter.

Newman's analysis indicates that higher memory costs due to strong AI-driven demand could lead to pressure on Apple's Q1 FY27 gross margin and earnings per share (EPS). He estimates blended iPhone gross margin at 39.6% and Apple gross margin at 45.8%, which are both below consensus expectations.

However, Newman expects stronger international pricing to partially offset the gross margin pressures, with an estimated global average iPhone price increase of about 1.3 percentage points higher than in the domestic market.