Apple Stock Hits Record High as Morgan Stanley Praises AI Efforts

Apple saw its shares surge by 2.5% to an unprecedented high on Monday after Morgan Stanley increased its price target for the tech giant and named it a “top pick,” endorsing the company’s advancements in AI (via Reuters).

In a strategic move to rival Google and Microsoft-backed OpenAI, Apple recently introduced Apple Intelligence, a new AI technology designed to entice customers to upgrade their devices. This innovation is expected to significantly boost sales of iPhones and iPads, according to Morgan Stanley analysts.

Apple’s shares, which have appreciated nearly 20% this year, reached $236.30, setting a new record and elevating the company’s market capitalization to an impressive $3.62 trillion, the highest in the world.

Morgan Stanley’s endorsement emphasized that “Apple Intelligence is a clear catalyst to boost iPhone and iPad shipments.”

The newly unveiled AI technology is currently compatible with only 8% of iPhone and iPad devices. With 1.3 billion Apple smartphones in active use, the potential for future sales is substantial. Analysts at Morgan Stanley predict that Apple could sell nearly 500 million iPhones over the next two years.

This is a significant increase from their previous projection of 230 million to 235 million iPhones annually within the same period. Consequently, Morgan Stanley has raised its price target for Apple shares from $216 to $273.

According to data from LSEG, Apple’s stock holds an average “buy” rating with a median price target of $217, outperforming the S&P 500 index this year.

Despite the positive outlook, Apple’s market share experienced a slight dip. The company sold 45.2 million smartphones globally in the three months ending in June, a marginal increase from 44.5 million units sold during the same period last year. However, Apple’s market share declined from 16.6% to 15.8%.