Morgan Stanley predicts Apple TV+ to be a $9 billion business

What you need to know

  • Morgan Stanley predicts Apple TV+ to be a $9 billion business by 2025.
  • They also have adjusted its target price of Apple’s stock to $289.
  • The company continues to be their “top pick into 2020”.

Apple TV+ is going to be a monster in the streaming business.

Apple’s services business is set to grow by 20% next year according to Morgan Stanley analyst Katy Huberty. Reported by CNBC, she released a note on Wednesday that detailed the firm’s position on Apple’s stock price and its prediction for the success of Apple TV+.

Huberty believes that even with growing competition in the streaming market, that Apple TV+ will grow into a $9 billion business by 2025:

“With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25.”

Morgan Stanley has also raised its target price for Apple stock from $247 to $289, a 17% increase supported by its outlook for Apple TV+ as well as its prediction that many people will upgrade to the 2020 iPhones.

“With a growing list of catalysts, including accelerating Services growth and multiple expansion ahead of the 5G iPhone launch, and an attractive 8% total dividend + buyback yield, we continue to view Apple as our top pick into 2020.”

Apple TV+ launches on November 1st for $4.99 per month for up to 6 people for those who use Family Sharing. Apple is also running a limited-time promotion to get a free year of service if you buy a new iPhone, iPad, Mac, or Apple TV.