Can Apple's Foldable iPhone Fuel the Next Growth Cycle for the Stock?
Apple AAPL has expanded its flagship smartphone portfolio with the iPhone Duo, its first foldable iPhone, opening a new product category that could strengthen the company’s upgrade cycle and deepen engagement across its hardware, AI and services ecosystem. The launch comes against a strong backdrop for iPhone, which generated $54.3 billion in third-quarter fiscal 2026 (June quarter) revenues, up 22% year over year.
The foldable iPhone could provide AppleAAPL-- with another important catalyst for upgrades. Apple’s iPhone installed base reached an all-time high in the June quarter, while the company also recorded a June-quarter record for upgraders. With more than 2.5 billion active Apple devices globally, the company has a substantial customer base to which it can introduce the differentiated foldable form factor.
Will the foldable iPhone boost investor confidence in Apple stock? Let’s find out.
iPhone Duo: A Snapshot of the Features
Apple’s iPhone Duo combines a 5.4-inch outer Super Retina XDR display with a 7.6-inch inner display that is 50% larger than the iPhone 18 Pro Max. Apple has designed the device to offer a conventional smartphone experience when closed while providing a larger canvas for content consumption, gaming and productivity when opened. The displays support ProMotion and Always On functionality, while Apple Pencil support is expected later this year.
The foldable design also gives Apple an opportunity to differentiate the iPhone experience through software. iOS 27 brings Split View to iPhone, allowing users to operate two applications side by side, open multiple windows and save frequently used app combinations. Netflix, Zoom and Slack are already adapting their applications for the foldable form factor, which should help broaden productivity and entertainment use cases and strengthen developer support for the new device.
Apple is pairing the new form factor with its expanding AI capabilities. iPhone Duo incorporates Siri AI and Apple Intelligence, including personal-context understanding, onscreen awareness and privacy-focused processing through on-device computing and Private Cloud Compute. The A20 Pro chip features a dual 16-core Neural Engine with twice the compute capability for on-device AI models, 50% more unified memory bandwidth and advanced thermal management for demanding AI and multitasking workloads.
Can Foldable iPhone Boost Apple’s Prospects?
The launch of the foldable iPhone bodes well for Apple’s prospects. iPhone sales have been benefiting from higher shipments of premium Pro models. The introduction of another highly differentiated device could therefore help sustain demand among customers seeking premium features and potentially strengthen Apple’s product mix. Apple Upgrade could further support adoption. The recently launched U.S. leasing program is intended to make the company’s latest products more affordable for customers who prefer to upgrade on a regular schedule, with early feedback described as positive.
iPhone Duo is also expected to strengthen Apple’s Services opportunity. The company ended the latest quarter with more than 1.5 billion paid subscriptions, while Services revenues increased 12% year over year to $30.7 billion. A larger display optimized for multitasking, video, apps and AI could increase engagement across the App Store, iCloud and other services. Apple has also indicated that heavy Siri AI users may eventually have opportunities to move to higher iCloud Plus plans, creating an additional monetization avenue.
Although Apple expects high iPhone demand, it has warned that supply constraints affecting advanced-node chips are limiting iPhone, Mac and iPad availability. Memory costs are also rising. These factors could restrict Apple’s ability to fully capitalize on initial iPhone Duo demand. In fact, the memory shortage and rising prices have been blamed for declining global smartphone sales, which dropped 7% year over year in the second quarter of 2026, per Counterpoint Research. Samsung reclaimed the global leadership position with a 23% market share and growing 9% year over year, while Apple recorded 13% year-over-year growth and its highest Q2 market share (21%), driven by the continued strength of the iPhone 17 series.
AAPL Rides on Strong iPhone Sales, Improving AI Prospects
Apple shares have appreciated 16% year to date (YTD), underperforming the broader Zacks Computer and Technology sector’s return of 18%. However, the stock has outperformed Alphabet GOOGL, Microsoft MSFT and Amazon AMZN over the same time frame. Shares of Alphabet, Amazon and Microsoft have returned 5.7%, 9.4% and 1.7% YTD.
Apple Stock’s YTD Price Performance
Image Source: Zacks Investment Research
Apple shares have benefited from a strengthening product cycle, growing Services revenues and optimism around the company’s expanding AI capabilities. Apple continues to expect high iPhone demand, forecasting mid-teens year-over-year iPhone revenue growth for the fourth quarter of fiscal 2026 (September quarter) despite supply and foreign-exchange headwinds. The company’s initiatives to develop next-generation AI capabilities that combine on-device processing with Private Cloud Compute are expected to stimulate future device upgrades.
AAPL’s FY26 Earnings Estimate Revision Shows Steady Trend
The Zacks Consensus Estimate for Apple’s fiscal 2026 earnings has been steady at $8.85 per share over the past 30 days, indicating 18.63% growth from the figure reported in fiscal 2025.
The consensus mark for Apple’s fiscal 2026 revenues is pegged at $477.42 billion, indicating 14.72% growth over the figure reported in fiscal 2025.
Apple’s Shares are Overvalued
Apple shares are overvalued, as suggested by a Value Score of F. The AAPLAAPL-- stock is trading at a forward 12-month price/earnings (P/E) of 33.18X compared with the broader sector’s 20.63X.
Apple shares are trading at a premium compared with peers, including Alphabet, Microsoft and Amazon. Shares of Alphabet, Microsoft and Amazon are trading at a P/E multiple of 20.03, 24.22 and 22.26, respectively.
Apple Stock’s Valuation
Image Source: Zacks Investment Research
Conclusion
Apple’s iPhone Duo adds a potentially meaningful catalyst to its already strong iPhone franchise, supported by a large installed base, robust premium-device demand, expanding AI capabilities and growing Services monetization opportunities. The foldable form factor could encourage upgrades and deepen engagement across Apple’s ecosystem. However, near-term supply constraints, rising memory costs and a premium valuation may limit upside despite solid earnings and revenue growth expectations.
Apple currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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