Apple at all-time high after Morgan Stanley calls stock ‘top pick’ for AI efforts

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 a “top pick,” citing the company’s AI initiatives as a boost to device sales. In an effort to catch up with Alphabet’s Google and Microsoft-backed OpenAI, Apple unveiled Apple Intelligence last month, encouraging customers to upgrade their devices to access the new technology.

Apple’s shares, which have increased nearly 20% this year, rose to $236.30, giving the company a market value of $3.62 trillion, the highest in the world. Morgan Stanley analysts stated, “Apple Intelligence is a clear catalyst to boost iPhone and iPad shipments.”

The new technology is compatible with only 8% of iPhone and iPad devices, yet Apple has 1.3 billion smartphones currently in use by customers. Analysts predict that the company could sell nearly 500 million iPhones over the next two years. Morgan Stanley, which previously projected Apple would sell between 230 million and 235 million iPhones annually over the next two years, increased its price target for Apple’s shares from $216 to $273.

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, according to LSEG data. Industry analysts expect Samsung and Apple to lead the global smartphone market recovery this year, driven by the excitement around GenAI-enabled smartphones. Apple sold 45.2 million smartphones globally in the three months ending in June, up from 44.5 million a year earlier, though its market share fell to 15.8% from 16.6% in the same period, according to IDC data.