Apple’s shares surged 2.5% to a record high on Monday after Morgan Stanley raised its price target for the iPhone maker’s stock and designated it as a “top pick,” citing the company’s advancements in artificial intelligence (AI) as a significant driver for device sales.
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In a bid to catch up with competitors like Google and Microsoft-backed OpenAI, Apple recently introduced Apple Intelligence. This new technology is expected to entice customers to upgrade their devices to access the latest AI capabilities.
Apple’s shares, which have climbed nearly 20% this year, reached $236.30, elevating the company’s market value to $3.62 trillion, the highest in the world.
“Apple Intelligence is a clear catalyst to boost iPhone and iPad shipments,” said Morgan Stanley analysts.
The new AI technology is currently compatible with only 8% of iPhone and iPad devices. With 1.3 billion iPhones in use globally, analysts predict Apple could sell nearly 500 million iPhones over the next two years.
Previously, Morgan Stanley expected Apple to sell between 230 million and 235 million iPhones annually over the next two years. However, they have now raised their price target for Apple’s shares to $273 from $216.
According to LSEG data, the stock holds an average rating of “buy” with a median price target of $217 and has outperformed the S&P 500 index this year. Industry analysts anticipate that Samsung and Apple will lead the global smartphone market recovery this year, driven by the excitement around AI-enabled smartphones.
Apple sold 45.2 million smartphones globally in the three months ending June, an increase from 44.5 million units sold a year earlier. Despite this growth, Apple’s market share fell to 15.8% from 16.6% during the same period, according to IDC data.
