Bank of America expects Apple to raise prices for Mac and iPad models while slightly lowering unit sales forecasts across product categories.
The bank raised its fiscal 2026 revenue estimate for Apple to $469.8 billion, noting that resilience in services profit could partially offset pressure in the hardware segment.
Thanks to its procurement scale, long-term supplier relationships, and supply chain optimization capabilities, Apple is still expected to outperform the broader smartphone and PC markets in terms of shipments.
Bank of America expects that price increases will slightly dampen demand across Apple’s product lines, and accordingly has modestly lowered its unit sales assumptions for iPhone, Mac, and iPad. For Mac and iPad, the bank similarly anticipates Apple will raise prices to offset rising component costs. Apple’s decision to lead with price increases on its premium products may provide a case study for the entire smartphone industry: manufacturers with strong brand equity and customer loyalty may be able to pass on costs to consumers more smoothly, while those lacking differentiation may be forced to make more difficult trade-offs between volume and profit margins. Apple’s Revenue Expected to Continue Expanding Based on forecast data, Bank of America remains optimistic about Apple’s revenue expansion over the coming years. The bank raised its FY2026 revenue estimate from $468.7 billion to $469.8 billion, representing a year-over-year increase of 12.9%; FY2027 revenue estimate from $531.4 billion to $534.99 billion, a 13.9% increase; and FY2028 revenue forecast to $574 billion, up 7.3% year-over-year. By segment, Bank of America projects iPhone revenue of $243.75 billion in FY2026, up from $209.59 billion in FY2025; services revenue is expected to grow from $109.16 billion in FY2025 to $124.74 billion, reaching $140.01 billion in FY2027, and $158.53 billion in FY2028. The importance of the services segment is therefore becoming more pronounced. While hardware price increases may cushion rising memory costs, they also put pressure on unit sales and hardware gross margins. Bank of America estimates that Apple’s product segment gross margin may face an additional pressure of approximately 100 basis points; however, services segment profit margins are expected to remain stable, with possible upside, potentially offsetting some of the hardware-side pressures. In terms of overall profitability, Bank of America projects Apple’s FY2026 operating margin at 36.
3%, higher than the 35.0% in fiscal 2025; however, it will decline to 34.9% in fiscal 2027, before rebounding to 35.5% in fiscal 2028. This reflects storage costs, post-price-increase demand elasticity, and product mix changes, which may continue to impact margin trends over the next one to two years. Apple Can Leverage Supply Chain Advantages to Mitigate Price Hike Impact Compared with many consumer electronics manufacturers, Apple holds stronger bargaining power during periods of memory supply tightness. Bank of America noted that Apple has maintained stable partnerships with memory chip suppliers over the long term, and its massive procurement scale and robust balance sheet make it easier to secure medium- to long-term supply guarantees. This means Apple has more tools to hedge against the impact of price increases. In addition to end-product price hikes, Bank of America expects Apple to absorb part of the cost pressure through compressing other component costs, using more recycled or reclaimed materials, reducing operating expenses, and optimizing logistics and supply chain efficiency. Bank of America expects Apple’s shipment volumes to significantly outperform the overall smartphone and PC markets, not only due to supply security but also because of its product ecosystem, premium positioning, and potential replacement demand driven by AI features. The bank maintains a Buy rating on Apple and a price target of $380, which is based on 37 times the fiscal 2027 calendar year earnings per share of $10.27. Compared with Apple’s price-to-earnings range of 19 to 35 times over the past five years, with a median market capitalization multiple of approximately 27 times, this valuation is not low. Bank of America believes that Apple is well positioned to benefit from multi-year replacement cycles, feature upgrades brought by Agentic AI, a rising contribution from the services segment, substantial cash reserves, and the potential for expansion into new end markets, thereby justifying a valuation premium above the upper bound of its historical range.
