Keep your bat on your shoulder and be ready to swing if Apple’s stock falters ahead of this month’s foldable iPhone release, Jim Cramer said Thursday. The simple reason to be alert: Wall Street may be underestimating the importance of the iPhone Duo for the company’s financial and stock market performance. Jim said that includes analysts at Morgan Stanley, who cut their price target on Apple shares on Thursday, believing the company’s new iPhone line wouldn’t bring a ton of lift to their earnings estimates. “Once this guy takes (the stock) down, if you don’t own Apple, buy it before the Duo,” Jim said during Thursday’s morning meeting. Shares are down about 1% as of Thursday afternoon, at around $329 apiece. After hitting a new 52-week high of $345.34 on September 22, the stock is down more than 4%. Apple’s first foldable device – unveiled at its annual fall hardware event on September 9 – will be available for pre-order on October 16, ahead of its official release on October 23. Starting at $1,999 and available in Starry White and Night Sky color, Apple is touting the phone as having the largest screen ever for the iPhone product line. The company also claims that the phone is sleek and compact enough to easily fit in your pocket. When closed it is about the size of a passport. Since previewing it himself at Apple’s New York flagship store on September 18, Jim believes the Duo is a game-changer in the investing narrative. He acknowledged that the new foldable iPhone models – the iPhone 18 Pro and Pro Max – may not be blockbusters in the same way that last year’s iPhone 17 crushed consensus expectations. This is the first iPhone launch under CEO John Ternus, who took over from veteran boss Tim Cook on September 1. “It (the iPhone Duo) is what’s going to move this stock,” Jim said earlier Thursday on CNBC. AAPL YTD has boosted Apple’s stock performance since the start of the year. Morgan Stanley, on the other hand, thinks it will be harder for Apple shares to achieve significant outperformance after a strong run over the past six months. The stock is up more than 28% during that time. The company maintained an equivalent rating of Buy, but slightly reduced its price target by $5 to $355 per share. “The next two years of product innovation under new CEO John Ternus are among the most exciting and consequential we can remember in recent history,” the analysts wrote. The company expects Apple to achieve four consecutive years of iPhone unit growth for the first time since fiscal 2015, with earnings per share compounded about 13% between fiscal 2026 and 2028. Apple’s fiscal 2027 began on Sunday. “But as we digest what we’ve learned since iPhone’s launch, including pricing, specifications, delivery times, Siri AI, service pricing actions and supply chain controls, we come away with a model that has changed little from pre-launch,” the analysts said. The company raised its revenue estimates slightly, citing stronger iPhone production and potential higher prices for Macs and services. However, lower-than-expected average selling prices for new iPhones and rising memory costs largely offset these gains, leaving the EPS outlook for fiscal 2027 and 2028 broadly unchanged. In the US, the iPhone 18 Pro starts at $1,199, which is $100 more than the entry price of the iPhone 17 Pro. The iPhone 18 Pro Max starts at $1,299, also up $100 from the previous year. Besides introducing foldable mode, another notable thing about Apple’s iPhone lineup this fall is the lack of a base model. There are currently only the premium Pro and Pro Max on the market. The company is expected to introduce the standard iPhone 18 in the spring. Jim didn’t dispute Morgan Stanley’s research, but argued that the company wasn’t putting enough weight on the iPhone Duo’s long-term promises. “There are only five mentions of the Duo in the (Morgan Stanley) article. Five! The Duo is revolutionary,” Jim said, suggesting that Morgan Stanley is letting the limited first-year supply of the iPhone Duo overshadow opportunities for future growth. Although analysts say the device could become an “increasingly important contributor to future upgrade cycles,” they expect its near-term financial impact to be relatively modest, projecting that up to 20 million units will be produced in its first cycle, generating $43 billion in revenue for fiscal 2027, or just 14% of the company’s total projected iPhone sales of $301.9 billion. dollars for that year. When Jim was at the iPhone 18 launch event in New York, he said he asked CEO Ternus if the company would have enough Duos to meet demand. Ternus said he thought so. Despite the constraints highlighted by Morgan Stanley, Jim said Thursday that investors shouldn’t overlook the tech giant. He joked: “The Duo won’t get five mentions in the next article you read from Morgan Stanley.” (Jim Cramer’s Charitable Trust is long APPL. See here for a complete list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
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