Morgan Stanley just published survey data that makes a strong case for owning Apple (AAPL) stock. The firm’s AlphaWise Global Smartphone Survey was released March 22. It shows iPhone upgrade intentions hitting an all-time survey high.
The data support the bank’s above-consensus iPhone forecast. Morgan Stanley keeps its overweight rating and $315 price target unchanged. The stock closed at $247.99 on March 20. That target implies roughly 27% upside from that level.
What the survey found
The headline number is a blended global iPhone upgrade rate of 37%, up 2 percentage points year over year. That is the highest reading in the survey’s history. The driver is China, where upgrade intentions surged 9 points year over year to reach their own all-time high in the survey.
On the switching side, Apple’s net switching rate improved to 11%. That is a five-year high. Apple was the only major smartphone brand in the survey with a positive and improving net switching rate.
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Samsung, Xiaomi, Huawei, and others were all negative. That positions Apple to gain market share in 2026 even as the overall smartphone market faces pressure.
Together, these data points support Morgan Stanley’s FY26 iPhone shipment forecast of approximately 260 million units, which sits 3% above Street consensus.
The foldable iPhone finding that stood out
The most surprising result in the survey may be the level of interest in a foldable iPhone. Morgan Stanley found that 27% of global iPhone owners are “extremely interested” in paying for one. In China, that figure rises to nearly 40%.
The bank does not expect a quarter of the installed base to rush out and buy a first-generation foldable device. But the demand signal is strong. Morgan Stanley expects Apple to more than double the global foldable smartphone market within 18 months of launch.
The base case puts foldable iPhone revenue at approximately $40 billion. The bull case reaches $60 billion.
The foldable iPhone is expected to launch in fall 2026 alongside the iPhone 18 Pro lineup. If the survey data translates to actual purchases, the FY27 revenue impact would be significant. Morgan Stanley’s FY27 iPhone revenue estimate is already 14% above Street consensus. The foldable is a big reason why.
Where Apple Intelligence stands
Not everything in the survey was positive for Apple. Consumer perception of Apple Intelligence continued to deteriorate year over year. The feature ranked seventh globally as a reason to upgrade to an iPhone. In the U.S., the decline was the most pronounced of any region surveyed.
Willingness to pay for Apple Intelligence also fell. Respondents said they would pay approximately $8 per month for an unlimited subscription, down from roughly $9 per month in the prior year’s survey. That is an 11% year-over-year decline.
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Morgan Stanley flagged this as a risk worth watching. The 2026 Siri and Apple Intelligence revamp becomes more critical in light of these numbers.
AI features remain important to smartphone buyers broadly. But Apple appears to be lagging Android competitors in consumer perception of its AI capabilities.
What this means for AAPL investors
Morgan Stanley laid out the key variables investors should watch this year:
- iPhone upgrade cycle. Record upgrade intentions suggest the aged iPhone installed base is beginning to refresh. Replacement cycles are expected to contract by 0.2 years in 2026, which supports shipment volumes.
- Foldable launch execution. The survey demand signal is encouraging, but first-generation foldable adoption is inherently uncertain. The revenue upside is large if execution is strong.
- Memory cost impact. Unprecedented memory price inflation is expected to push global smartphone prices higher. Morgan Stanley sees this as a bigger headwind for Android competitors than for Apple, given Apple’s pricing power. But the June quarter gross margin guidance will be the first real read on how Apple is managing the cost pressure.
- Apple Intelligence revamp. The 2026 Siri upgrade needs to meaningfully improve consumer perception. The current trajectory is moving in the wrong direction.
Morgan Stanley’s $315 price target is based on 8.5x EV/Sales on FY27 estimates. That implies approximately 32x FY27 EPS of $9.74. Its revenue forecast sits well above the Street even as its EPS estimate is broadly in line with consensus.
The survey does not guarantee an upgrade supercycle. But the data points in that direction. An aged installed base, record upgrade intentions, strong switching dynamics, and a new form factor in the back half of the year make for a compelling setup.
Morgan Stanley thinks the market is not fully pricing that in yet.
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