Evercore ISI reiterates Apple stock rating on AI investment outlook

Evercore ISI has maintained an Outperform rating and a price target of $380 for Apple Inc. (NASDAQ:AAPL) following the company's fiscal 2026 10-K filing. This implies potential upside from the current $331.90 share price. However, the stock is considered overvalued relative to its Fair Value estimate, with a P/E ratio of 37.96. Apple's manufacturing purchase obligations increased by $33 billion to $89.7 billion, with $82.7 billion due within the next year, a 57% rise from $57 billion in the previous quarter.

The firm highlights that Apple now includes Siri AI technology as a service bundled with iPhone, Mac, and iPad purchases, with a portion of the device average selling price recognized over the service period. Deferred revenues grew 8% year-over-year to $14.8 billion, with $8.7 billion from the opening deferred-revenue balance of fiscal 2026.

Regional margin trends were mixed, with China EBIT margins declining 400 basis points to 39.6% despite 21% revenue growth. Total inventory rose 8% quarter-over-quarter to $14.5 billion, with component inventory up 37% quarter-over-quarter and 392% year-over-year, indicating increased supply-chain positioning ahead of hardware shipments.

Apple maintains a perfect Piotroski Score of 9, indicating strong financial health. Analysts have adjusted their outlooks, with DA Davidson raising the price target to $295 due to iPhone upgrades and strong Mac sales, while Wedbush maintained an Outperform rating but noted challenges in services growth. JPMorgan lowered the price target to $355, citing concerns over services revenue growth and gross margin pressures.

Aletheia Capital reiterated a Sell rating, expressing concerns over fiscal 2027 guidance due to rising costs and decelerating revenue. Despite these mixed outlooks, Evercore ISI remains optimistic with the Outperform rating and price target, citing healthy demand and growth prospects.