AAPL Stock On-Track For Worst Week In Four Months — Mac, iPad Price Hikes Spurs Demand, Margins Debate

• Evercore said that Apple’s price hikes could protect margins but also create fresh demand friction. 
• Wedbush’s Dan Ives said Apple remains well-positioned to raise product prices without materially hurting demand. 
• Apple stock is on-track to end the week 7.5% lower, its worst since February this year.

Apple (AAPL) stock gained close to 1% on Friday, but was on track to record its worst week since February this year as investors juggle falling demand and protected margins in the aftermath of the recent product price hikes. 

Among a raft of Wall Street takes on the price hikes resulting from the memory chip shortfall, most analysts feel demand will remain intact, and the announced hikes will support margins if demand falters. 

Global memory chip costs have skyrocketed and supply remains constrained amid a boom in demand by AI hyperscalers. The rise in prices is evident in the stellar quarterly revenue boost in memory chip manufacturer Micron’s recent earnings release, with revenues jumping over 300%. 

Morgan Stanley Feels Apple Price Hikes Are Purely To Protect Margins 

  Apple's recent 15% to 25% price increases for Mac, iPad, and accessories constitute an unprecedented move to protect gross margins against record-high memory cost inflation, according to a Friday note from Morgan Stanley. 

The investment bank suggested that despite these hikes, Apple’s ecosystem lock-in and demand resilience could continue to provide revenue and earnings growth.

The magnitude of these adjustments indicates Apple is focused on "defending gross margins, not just offsetting cost inflation, particularly from memory," Morgan Stanley analyst Erik Woodring remarked.

The firm further highlighted that, excluding specific model-level adjustments, it found no comparable price increases of this scale in the last 15 years.

Dan Ives Maintains Bullish Stance On AAPL

According to TheFly, Wedbush’s Global Head of Tech Research, Dan Ives, maintained his bullish outlook on Apple. Wedbush maintained its ‘Outperform’ rating and $400 price target, implying an upside potential of 45% from Thursday’s closing price.

Ives said Apple remains well-positioned to raise product prices without materially hurting demand or increasing customer churn, citing the company's growing focus on premium devices and higher-end consumers.

AAPL Stock: Retail View 

Retail sentiment on Stocktwits around Apple trended in the ‘bullish’ territory at the time of writing.

“I hate to say it, Apple lovers die-hards will pay more,” one user said. “Apple products have become price inelastic over the years! Brand loyalty will be pushed to its limit  but will prevail.” 

AAPL stock is up 39% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 21% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 31%.

The Vanguard Total Stock Market Index Fund ETF (VTI) is up 22% during this period, while the Vanguard Growth Index Fund ETF (VUG) is up 16%.

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