Apple is hosting its annual fall event at the Steve Jobs Theater in Cupertino today, marking the first product launch for John Ternus, who took over as CEO from Tim Cook on September 1, Bloomberg reported.
The headline act is the company’s first foldable iPhone, expected to be unveiled at the event. This device could change its product line, following Samsung and Huawei’s footsteps.
Citi analysts estimate Apple will sell about 5 million units of the device in the second half of 2026 and another 2.3 million units in the first quarter of 2027.
What’s expected on stage
- Foldable iPhone (codename V68), expected selling price to start above $2,000
- iPhone 18 Pro and iPhone 18 Pro Max, with the standard iPhone 18 arriving in early 2027
- Apple Watch Series 12 and Apple Watch Ultra 4 with a new wearable lineup
- Generative AI-powered Siri: Apple’s answer to pressure over its AI position
Catching up in a category Apple didn’t invent
Foldable phones are not new. Samsung and Huawei have sold folding devices for years and hold dominant positions in the US and Chinese markets.
Apple has a history of entering established markets and turning it on its head. It did something similar with MP3 players and smartphones in the early years of technology development.
Bloomberg’s Mark Gurman called it “the most exciting iPhone launch in a decade.”
How AAPL stock has historically reacted to new launches
History offers an encouraging data point for bulls. Research from Bank of America analyst Wamsi Mohan found that Apple shares usually dip modestly right after iPhone reveal events before roaring back over the next 30 to 60 days.
Since the original iPhone launch in 2007, the stock has gained in the 60 days after a launch 17 times, with the biggest bump: 20% coming after the iPhone 11 unveiling in 2019.
Freedom Capital Markets analyst Paul Meeks warned investors in a CNBC interview not to get caught up in the excitement, highlighting the memory chip challenge.
Micron, SK Hynix and Samsung control about 90% of the memory market, he said, and as demand for AI data centers soaks up supply, “cost of goods sold goes up, gross margins go down” for device makers like Apple.
Memory prices are already squeezing margins
On Apple’s fiscal third-quarter call, outgoing CEO Tim Cook called the current market phase “a 100-year flood on memory pricing.”
He said the company had reluctantly raised prices in response. CFO Kevan Parekh explained that memory costs accounted for more than the sequential decline in gross margin.
Cook also warned that Apple could pay even higher memory costs heading into the September quarter, with supply constraints likely to touch the iPhone, Mac and iPad lineups.
The company’s guidance put September-quarter gross margin between 47% and 48%, with just a point of that cushion coming from tariff refunds.
The fundamentals still look solid for Apple
Apple’s business numbers are still pretty strong heading into the event. Here is what the numbers tell us:
- Revenue: $109.42 billion, up 16.4% year-over-year
- EPS: Beat consensus for a ninth straight quarter
- iPhone revenue: $54.25 billion
- Services revenue: $30.74 billion
AAPL traded around $310 to $313, up about 35% over the past year, giving Apple a market cap near $4.6 trillion. It is also a trailing price-to-earnings ratio close to 37, which is a higher multiple than most of its tech peers.
Is that valuation actually at risk?
Not everyone thinks Apple’s premium is safe. A Motley Fool analysis argues that the company’s multiple looks stretched next to other big tech peers.
If the stock’s forward P/E compressed to a big-tech average of around 25 times, applied to Wall Street’s 2027 earnings estimate of $9.57 a share, the shares would be worth close to $240, well below its current price.
The case was also based on the same memory-cost squeeze Cook and Meeks flagged.
The pricier components could push Apple to raise device prices, which could cause low sales and in turn affect the stock price.
Some experts still expect the market to demand a lower multiple for the stock, regardless of how today’s launch plays out.
