Evercore ISI Affirms Outperform on Apple, $380 Price Target

Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and $380 price target on Apple (NASDAQ: AAPL).

“AAPL released its FY26 10-K this morning.

We see five key takeaways from the filing: 1) Manufacturing purchase obligations increased significantly by ~$33B to $89.7B exiting the Sept-qtr, with $82.7B payable over the next 12 months, up ~57% q/q from $57.0B/$56.2B in the Jun-qtr.

We assume a large portion of that sequential increase is related to memory procurement, particularly NAND.

2) AAPL now explicitly includes Siri AI among services bundled with iPhone, Mac + iPad purchases, with a portion of device ASP deferred and recognized over the service period.

NT impact should be limited, but this becomes more relevant as Siri AI functions/subscriptions scale.

Deferred revs rose ~8% y/y to $14.8B, while $8.7B of FY26 revs came from the opening deferred-revenue balance versus $8.2B in FY25.

3) Regional margin trends were mixed in the Sept-qtr: China EBIT margins declined ~400bps y/y to 39.6%, despite 21% revenue growth (Services is a moderately lower portion of revenues here), while Japan contracted ~140bps to 48.8%.

In contrast, the Americas led EBIT margin expansion at approximately +310bps to 43.1%, followed by Rest of Asia-Pacific at +50bps and Europe at +25bps.

4) Expanded AI Investment Disclosures: AAPL added incremental disclosure around AI infrastructure, noting data center capacity investments require significant expenditures + long-term commitments.

AI is already pushing R&D/opex higher, with capex the next area to watch as Siri AI deployment broadens and agentic functions require more compute.

5) Component Inventory Continued to Build: Total inventory rose ~$3.4B q/q to $14.5B, with component inventory up ~$2.8B to ~$10.4B and driving the bulk of the increase.

Component inventory was also up ~37% q/q (+392% y/y), pointing to heavier supply-chain positioning ahead of upcoming hardware shipments.

Net/Net: The 10-K reinforces that AAPL is leaning more heavily into supply chain + AI investments as demand appears healthy, but the cost side is becoming a more meaningful overhang.

Higher memory procurement, rising AI-related opex + potentially higher capex keeps the margin debate front and center into FY27. Maintain OP and $380 target.”

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