By Angela Palumbo

Apple's launch of a budget laptop shouldn't hurt the stock. Instead, it hints at a change in the way the tech giant might launch products based on value.

The MacBook Neo has taken the internet by storm since Apple announced it last week. One simple Google search of the laptop populates a collection of rave reviews from people who have gotten their hands on the device before it officially becomes available on Wednesday.

The MacBook Neo starts at $599, making it Apple's most affordable laptop. The new MacBook Air with an M5 chip starts at $1,099, while the MacBook Pro with the M5 Pro chip starts at $2,199, and the MacBook Pro with the M5 Max chip starts at $3,599.

The Neo is powered by Apple's A18 chip. Rosenblatt Securities analyst Barton Crockett wrote on March 5 that "at this tier, Apple silicon is generally a better performer than the Intel i3/i5, and ARM chips for Chromebooks."

A price that low has led to questions about the potential hit to Apple's margins as memory costs rise. Lower margins would be bad for the stock, especially as it trades at a historically high valuation of 29.6 times earnings expected over the next 12 months, compared with its five year average of 27.4 times.

Analysts -- even ones that aren't bullish on the stock -- aren't concerned.

Apple reported December quarter product gross margins of 40.7% in January. Despite rising costs that aren't expected to go away anytime soon, analysts surveyed by FactSet anticipate product gross margins for the December 2026 quarter to be 40.6%. A drop, but nowhere near a massacre.

For the most part, Wall Street has confidence that Apple can offset some of its margin pressures through the sale of higher end products. For example, the new MacBook Air is $100 more than its predecessor.

"Memory/storage cost pressures for Apple's premium priced products are a modest percent of build of materials (BOM,) suggesting potential for other offsets that makes us more confident that Apple can perform well," Crockett wrote. He rates Apple as a Neutral, and slightly raised his price target on the stock to $268 from $267.

Citi analyst Atif Malik estimates that Apple will feel a 140 basis point gross margin headwind in 2026. However, he still rates Apple as a Buy with a $315 price target, which implies a 21% increase from the stock's last closing price of $259.88.

"Apple is poised to gain share this year, particularly in the mid -- tier segment, as competitors face greater risk from rising component costs," Malik wrote on March 8.

Apple had it's reasons for launching lower priced products now. Not only does it help the company stand out against competitors who are raising prices during a volatile memory environment, but Apple is also now adhering to a more budget friendly consumer as cost of living concerns remain top of mind. If the release goes well, it could set a precedent for the company and how it launches products based on price in the future.

Bloomberg has reported that Apple is looking to release a lineup of high end devices, including a foldable iPhone and a MacBook Pro with a touch screen. It's possible that the release of the Neo and a lower cost iPhone 17e on Monday hints at a future where Apple focuses its September release schedule on higher end devices, and uses its March release cycle to announce lower cost products.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 10, 2026 14:39 ET (18:39 GMT)

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