Apple Stock Hits Record High as Morgan Stanley Touts AI Efforts

Apple shares rose 2.5% to a record high on Monday after Morgan Stanley raised its price target on the iPhone maker's shares and designated the stock as a "top pick," citing the company's AI efforts as a boost to device sales.

AI as a Catalyst for Growth

In a bid to catch up with Alphabet's Google and Microsoft-backed OpenAI, Apple unveiled Apple Intelligence last month, encouraging customers to upgrade their devices to utilize the new technology. This move is expected to significantly boost sales of iPhones and iPads.

"Apple Intelligence is a clear catalyst to boost iPhone and iPad shipments," Morgan Stanley analysts commented. The new technology is currently compatible with only 8% of iPhone and iPad devices, and with 1.3 billion Apple smartphones in use globally, the analysts predict that the company could sell nearly 500 million iPhones over the next two years.

Stock Performance and Market Impact

Apple's shares, which have surged nearly 20% this year, reached $236.30, giving the company a market value of $3.62 trillion, the highest in the world. Morgan Stanley increased its price target on Apple's shares from $216 to $273. The stock has 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.

Global Market Expectations

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