Apple‘s (AAPL.O) shares surged 2.5% to a record high on Monday after Morgan Stanley boosted its price target and named the stock a “top pick,” citing Apple’s advancements in artificial intelligence as a driver for increased device sales.
In an effort to keep pace with Alphabet’s (GOOGL.O) Google and Microsoft-backed (MSFT.O) OpenAI, Apple introduced Apple Intelligence last month.
This new AI technology is designed to entice customers to upgrade their devices, further integrating advanced technology into Apple’s product lineup.
Apple’s shares, which have risen nearly 20% this year, hit $236.30, pushing the company’s market value to $3.62 trillion, the highest globally.
Morgan Stanley analysts commented, “Apple Intelligence is a clear catalyst to boost iPhone and iPad shipments.”
A photo captured by REUTERS/Lucas Jackson shows customers passing by an Apple logo inside an Apple store at Grand Central Station in New York on August 1, 2018.
The new Apple Intelligence technology is currently compatible with only 8% of iPhone and iPad devices.
With 1.3 billion Apple smartphones in use, analysts predict the company could sell nearly 500 million iPhones over the next two years.
Previously, Morgan Stanley estimated annual iPhone sales of between 230 million and 235 million over the next two years. They have now raised the price target for Apple’s shares to $273 from $216.
The stock holds an average “buy” rating with a median price target of $217 and has outperformed the S&P 500 index (.SPX) this year, according to LSEG data.
Industry experts forecast that Samsung (005930.KS) and Apple will spearhead the global smartphone market’s recovery this year, fueled by the excitement around GenAI-enabled smartphones.
In the three months ending in June, Apple sold 45.2 million smartphones worldwide, up from 44.5 million in the same period last year.
However, its market share decreased from 16.6% to 15.8%, according to IDC data.