Apple holds its iPhone launch on Wednesday, and the much-anticipated unveiling of the foldable iPhone will be a big test for the company and new CEO John Ternus.

Apple stock was down 1.2% to $316.22 on Tuesday after ending Friday down 2.5%. Shares have gained about 1% this month and were up 18% this year prior to the opening bell on Tuesday.

There’s been positive sentiment around Apple stock this month heading into the iPhone event on Wednesday, where Wall Street believes the company will announce the new iPhone 18 Pro, the iPhone 18 Pro Max, and its long-awaited foldable iPhone.

While the foldable iPhone has received the bulk of attention ahead of the event, Wall Street expects significant iPhone price increases as memory prices have risen due to strong demand from artificial intelligence and data centers.

Investors will be weighing the new products against price hikes on Wednesday. The biggest question is whether the foldable iPhone will live up to the hype.

MoffettNathanson analyst Craig Moffett on Tuesday raised his price target on the stock to $304 from $270 but maintained a Neutral rating on the shares.

“Bulls are excited that this might be a category-defining launch (coming eight years behind Apple’s competition, but no matter). They argue that the high reported average selling price of this product has the potential to generate topline and margin tailwinds,” Moffett wrote.

“Skeptics worry that this design will be a niche product, at best, akin to last year’s iPhone Air,” the analyst added.

Moffett wrote that the new foldable product doesn’t have a clear “use case” as it sits somewhere between a productivity tool and a pocket-sized iPhone.

Moffett also believes that the foldable iPhone will likely cannibalize sales from Apple’s existing product line.

That puts pressure on Ternus as he takes over the helm from Tim Cook.

“Incoming CEO John Ternus inherits Apple’s most exciting new
product pipeline in years,” Moffett wrote. “What Ternus also inherits is a sky-high valuation.”

For investors hoping the event will give the stock another boost, however, history suggests the reaction could be underwhelming.

Since 2017, Apple stock has on average declined 0.7% on the day of its iPhone launch events, according to Dow Jones Market Data. Morgan Stanley analyst Erik Woodring last week wrote that Apple stock will likely underperform on the day of the iPhone launch reflecting a “sell the news” investor mentality.

This time could be different, according to Bank of America analyst Wamsi Mohan.

Mohan wrote on Tuesday that while Apple investors have often exhibited a modest sell the news reaction, this time the stock’s performance will depend on the price increases, adoption of Siri AI features, and overall commentary on demand for the foldable iPhone.

The bottom line is there’s a lot on the line for Apple this week.