Apple is getting into the leasing business, and it's bringing Klarna along for the ride. Reports surfaced Tuesday that the tech giant is partnering with the Swedish fintech company to launch Apple Upgrade, a new device-leasing program that could make it cheaper and easier for customers to get their hands on the latest gadgets.

Investors liked what they heard. Klarna Group plc (KLAR) shares jumped as much as 11% to $20.78 before settling back. At the time of publication, the stock was up 1.87% at $19.11.

According to Bloomberg, Apple plans to launch Apple Upgrade on July 28. The program will cover most iPhone, Mac, iPad, and Apple Watch models and will initially roll out in the U.S., available through Apple's retail stores and online channels.

How Apple Upgrade Works

Think of it like a subscription for your hardware. Customers can pay off a device early, upgrade to a new model before the lease ends, or keep the product after the lease period. Some of those options may come with extra fees, but the core idea is flexibility.

Lease terms vary by device: iPhones and Apple Watches run for 24 months, while Macs and iPads stretch to 36 months. To get approved, customers will need to pass a soft credit check—no hard pull on your credit score.

Apple plans to market Apple Upgrade as a lower-payment alternative to its existing financing options. In fact, the company will stop accepting new enrollments in its current iPhone Upgrade Program and standard financing plans to make room for this new offering.

Klarna's Earnings and Analyst Outlook

For Klarna, this deal is a big win, but the next major catalyst is its second-quarter earnings report, scheduled for August 18. Wall Street expects the company to report a loss of 7 cents per share on revenue of $991.82 million, according to consensus estimates.

Analyst sentiment remains broadly positive. The stock carries a Buy consensus rating with an average price target of $22.75, based on 22 analysts. Forecasts range from $18 to $27.

Recent analyst actions have been constructive. Goldman Sachs reiterated its Buy rating and raised its price target to $25 on July 9. UBS maintained its Buy rating and lifted its target to $23 on July 8, while JPMorgan reaffirmed its Overweight rating and increased its target to $22 the same day.

Klarna Price Action

At the time of publication Tuesday, Klarna shares were up 1.87% at $19.11.