While Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) recently offloaded another multi-billion dollar slice of its once-iconic stake in Apple (Nasdaq: APPL), a growing number of institutional investors are making strong bets on the global technology giant being one of the Nasdaq-100 Index’s outperformers in FY26.
One of the most heavily weighted stocks on the tech-heavy exchange – around 12.3% - Apple has a market cap of US$4 trillion and since early May the share price has jumped 24% to US$271.84.
Interestingly, Berkshire Hathaway is using the proceeds from its recent Apple selldown to place bigger bets on AI and has and started a new position in Alphabet.
Like a lot of institutional investors, Berkshire Hathaway has pointed the finger at Apple for being left behind in the global race for AI dominance.
However, while it might be late to join the party, Morgan Stanley foresees Apple moving from AI laggard AI leader in 2026.
In a bullish move for Apple investors, the broker’s analyst Erik Woodring on Wednesday, reiterated an overweight rating on the stock while hiking the price target from US$305 to US$315.
With the stock now regarded as a high-conviction idea in the broker’s 2026 IT hardware outlook, it’s clear that Morgan Stanley, along with other institutional investors are trying to front-run a potential upgrade cycle.
However, execution and user adoption remain the swing factors.
While the Morgan Stanley team believe the stock price already factors in the strong early iPhone 17 demand, Woodring believes Apple’s transition from AI laggard to industry leader in 2026 will be driven by an anticipated Siri overhaul leveraging advanced on-device AI capabilities.
It’s understood that Apple’s upgraded Siri digital assistant will likely use Alphabet’s (GOOGL) Google Gemini AI models.
“Apple will become a leading distributor of AI technologies with a Siri re-release in spring 2026,” said Woodring, who expects the company’s near-term priorities to centre on driving adoption, enhancing the user experience, and positioning Apple as a leading AI distributor.
“With this update, we expect Apple to deliver on the long-promised functionality of leveraging users’ on-device information/data, such as Siri’s ability to ‘understand and take action with things on your screen.”
In early 2027 Woodring suspects Apple might introduce a paid tier for its Apple Intelligence offering with more agentic AI capabilities.
Meanwhile, citing solid iPhone sales momentum and the company’s ability to absorb higher memory and chip costs through higher average selling prices, Jefferies analysts see Apple’s first-quarter FY26 results beating consensus forecasts.
The broker believes Apple is “highly resilient” to sharp increases in memory costs because those costs account for a relatively small portion of iPhone ASPs.
The broker also pointed to “pulled-in” consumer demand, with buyers pre-empting future price hikes, which is helping to sustain strong sales of the iPhone 17 lineup, especially the base model.
Following 40% year-on-year growth in iPhone sales in China - driven largely by the iPhone 17 series – Jefferies raised its first-quarter fiscal 2026 iPhone unit forecast by 7% to 86.9 million units, representing 18% growth year-on-year.
Overall, Jefferies now forecasts Apple’s first-quarter FY26 earnings per share to grow about 15%, roughly 6% above consensus.
For FY26 and FY27, the broker projects revenue growth of 9% and 7%, respectively, with EPS growth of 12% and 10%.
Across the board, the consensus rating for Apple remains a Buy among over 40 analysts, with a collective average price target of approximately US$289.56, which suggests a potential upside from the current price.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
