Growth is accelerating while expenses are as well, says Morgan Stanley's Erik Woodring

Core Insights - Apple is experiencing a resurgence in iPhone sales, with double-digit growth expected in the December quarter, marking the fastest growth since 2021 [4][11] - Operating expenses (opex) for Apple are projected to grow 18% year-over-year in fiscal 2026, indicating a willingness to invest heavily, particularly in AI infrastructure [3][12] - The company is adopting a hybrid model, balancing internal development with partnerships, particularly in the AI space, which could yield high returns on investment [8][10] Financial Performance - iPhone revenue is a significant contributor, accounting for 53% of total revenue, and the iPhone 17 is performing better than expected [11][12] - Services revenue is also growing at an annual rate of 14%, contributing to overall financial health [12] - Despite a decline in the Chinese market by 4% year-over-year in the September quarter, early demand for the iPhone 17 suggests potential recovery [15][16] Market Position and Strategy - Apple is positioning itself as a builder rather than a buyer, focusing on internal development while also leveraging its role as a distribution partner for services like Google search [5][7] - The company is expected to introduce innovative products, such as a foldable iPhone, which could drive future sales and market interest [13][14] - Valuation metrics indicate that as services become a larger portion of gross profit, there is potential for higher earnings multiples, supporting a bullish outlook on the stock [18][19]