Apple’s shares surged 2.5% to reach an all-time high on Monday following Morgan Stanley’s upward revision of its price target for the iPhone maker’s shares and its designation of the stock as a “top pick.”
The boost was attributed to Apple’s advancements in AI technology, which are expected to drive device sales.
In a bid to compete with Alphabet’s Google and Microsoft-backed OpenAI, Apple unveiled Apple Intelligence last month, enticing customers to upgrade their devices to access the new technology.
Currently, Apple’s shares are up nearly 20% this year, reaching $236.30 and achieving a market value of $3.62 trillion, the highest globally.
Morgan Stanley analysts noted that Apple Intelligence represents a significant catalyst for increased iPhone and iPad shipments. They highlighted that while the new technology is currently compatible with only 8% of iPhone and iPad devices, Apple has a user base of 1.3 billion smartphones, suggesting potential sales of nearly 500 million iPhones over the next two years.
Previously anticipating annual iPhone sales of between 230 million and 235 million units, Morgan Stanley raised its price target on Apple’s shares from $216 to $273.
According to LSEG data, the stock maintains an average “buy” rating with a median price target of $217, and has outperformed the S&P 500 index this year.
Industry analysts predict that Samsung and Apple will lead the recovery in the global smartphone market this year, driven by the excitement surrounding AI-enabled smartphones.
Despite selling 45.2 million smartphones globally in the quarter ending June, up from 44.5 million the previous year, Apple’s market share dipped slightly from 16.6% to 15.8% during the same period, as per IDC data.
