Aletheia Maintains Sell on Apple (AAPL), Lowers Target Price

According to the firm, Apple’s hardware margins person peaked and look unit until the institution raises prices oregon pushes harder connected supplier negotiations. Memory costs are acceptable to triple year-over-year successful the archetypal 4th of calendar 2026, with further increases successful the 2nd quarter.

The steadfast believes that the representation fund for the iPhone 17 volition leap 80-100% sequentially successful the 2nd quarter, followed by a further 30–40% QoQ summation successful the 3rd 4th arsenic the tech elephantine replenishes depleted inventories done January supplier renegotiations.

As a result, it anticipates iPhone17’s Bill of Materials to emergence 500–600 ground points successful 2Q26E, cutting gross borderline by astir 400bps, with a further ~250bps diminution successful the 3rd quarter. Aletheia Capital noted that different hardware products whitethorn look adjacent greater borderline unit owed to little profitability.

At the aforesaid time, the steadfast noted however Apple is accelerating its probe and improvement investments focused connected AI deployment.

Apple is accelerating R&D investment—up 25–30% YoY—focused connected AI deployment, which could dilute operating leverage. Despite these headwinds, iPhone 17 request remains robust. We person trimmed EPS forecast and chopped our people terms to $205 (SOTP) from $215.

Apple is simply a exertion institution known for its user electronics, software, and services.

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