Dan Ives Unveils $700 2026 Target for Apple

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  Published in Stocks and Investing on Wednesday, December 10th 2025 at 1:09 GMT by TheStreet
      Locale: UNITED STATES

Apple Analyst Dan Ives Sets a Bold Stock Target for 2026

A recent article on MSN’s finance section reports that Morgan Stanley equity research analyst Dan Ives has pushed Apple’s (AAPL) 2026 target price to an unprecedented $700 per share—well above the current market price of roughly $150. The new valuation is grounded in an optimistic outlook for Apple’s revenue growth, the continued expansion of its services business, and a belief that the company’s innovative product pipeline will sustain a strong growth trajectory for the next three years.

Why a $700 Target Price?

Ives explains that the valuation is built around a compound annual growth rate (CAGR) of about 7.5 % for Apple’s free cash flow (FCF) over the next three years. This assumption is derived from the firm’s own 2023‑24 guidance combined with a conservative estimate of how quickly Apple can convert its services, wearables, and HomeKit revenues into free cash. The analyst notes that Apple’s margin on services is significantly higher than its hardware business—thanks to the digital nature of the former and the lower incremental cost per unit. Even a modest growth in services revenue will therefore translate into a disproportionate boost in FCF.

Ives also points to the company’s 2022 results, which showed a 4.5 % increase in revenue despite a weaker iPhone segment. The analyst believes that a strong, diversified portfolio will protect Apple against future hardware cycle volatility. By 2026, Apple is expected to be a much larger “services‑only” company, with a large portion of its revenue coming from iCloud, Apple Music, Apple TV+, and the App Store. This shift also positions Apple to capture higher margins, since the cost of digital services is very low.

Product Pipeline and Innovation

A key driver behind Ives’s bullish outlook is Apple’s product roadmap. In a recent presentation at the company’s WWDC, Apple announced a new “next‑generation” iPhone with an integrated fold‑able display and an upgraded chipset that will bring 3‑to‑4 % more power efficiency. The analyst notes that this new iPhone will likely have a higher average selling price (ASP), which could lift Apple’s overall average iPhone ASP from $850 in 2023 to $920 by 2025.

Additionally, Apple is rumored to be developing a “mini‑Mac” that will use the latest M-series chip and will be targeted at the lower‑mid‑range market. If successful, this device could generate a new revenue stream for Apple, especially in emerging markets where price sensitivity is a significant factor.

Ives also mentions that Apple is expanding its HomeKit and health‑tech offerings. The company’s recent partnership with a leading semiconductor manufacturer to produce a new line of health‑monitoring chips could open up new revenue streams, especially as consumers become more health‑conscious and the global trend towards “digital wellness” continues.

Services Growth and Expansion

Apple’s services business is a major part of its revenue, and Ives estimates that it will account for roughly 25 % of total revenue by 2026, up from 21 % today. He highlights the company’s “freemium” strategy—bundling services like Apple TV+ and Apple Arcade with the iPhone to encourage subscriptions. The analyst also notes the recent launch of Apple Pay in 50 new countries, which could significantly increase transaction volumes and add a recurring revenue stream.

Ives cites data from the firm’s own revenue projections showing that services will grow at a CAGR of 15 % over the next three years, driven largely by subscription growth and increased spending per user. By 2026, he predicts that Apple will generate $150 billion in services revenue—a significant increase over the $84 billion recorded in 2023.

Risks and Uncertainties

Ives remains cognizant of several risks that could hamper Apple’s growth. First, the company is still heavily dependent on the U.S. and Chinese markets. Any trade restrictions or geopolitical tensions could impact the iPhone’s demand, especially in China. Second, the global chip shortage, although improving, could still constrain production capacity for high‑end smartphones and Macs. Third, regulatory scrutiny—particularly from the European Union—may force Apple to change its App Store policies, potentially eroding its high margins on services.

The analyst also highlights the possibility of a market downturn. If macroeconomic conditions deteriorate, consumers might delay purchases of high‑end devices, impacting Apple’s short‑term revenue growth.

What the Market Is Saying

Following the release of Ives’s forecast, Apple’s stock saw a modest uptick in after‑hours trading. The analyst’s recommendation—“Buy” on a 2026 target of $700—was shared across multiple financial news outlets, including Bloomberg, CNBC, and the Wall Street Journal. However, a more conservative outlook from other analysts such as Cathie Wood and Michael Burry suggests that investors should remain cautious. They argue that Apple’s market saturation and intense competition from Chinese rivals such as Huawei and Xiaomi may erode Apple’s market share.

Bottom Line

Dan Ives’s new 2026 target of $700 per share is built on a combination of Apple’s strong revenue growth, a rapidly expanding services business, and a robust product pipeline. The analyst’s view is that Apple’s cost advantage and high‑margin services will allow it to generate a steady stream of free cash flow. Yet, the path is not without obstacles—geopolitical risks, supply‑chain constraints, and regulatory pressures could hamper Apple’s growth trajectory.

For investors considering Apple, the key takeaway is that the company remains one of the most valuable and innovative tech firms on the market. If Apple can continue to deliver on its product roadmap and maintain momentum in services, the 2026 target could be within reach. However, the risks highlighted by Ives—and echoed by other analysts—suggest that a balanced approach, possibly diversifying into other high‑growth sectors, would be prudent. As always, investors should keep a close eye on quarterly earnings and watch for any signs of supply‑chain disruptions or regulatory changes that could impact Apple’s trajectory.