Apple Stock Soars to Record After Morgan Stanley Names It Top Pick

Apple Expected to Trigger Record Device Upgrades with New AI Platform

Apple Inc. has been identified as a top pick by Morgan Stanley, with prospects hinging on its new artificial intelligence platform, dubbed Apple Intelligence. This platform is anticipated to catalyze an unprecedented wave of upgrades across its range of devices, including smartphones, tablets, and computers.

Analysts Project Significant Growth

Analyst Erik Woodring has increased his price target for Apple shares to $273, placing it among the highest estimates from analysts. He suggests that the introduction of Apple Intelligence could lead to a record number of device upgrades, marking it as a critical trigger for a multi-year upgrade cycle. The highest price target comes from Loop Capital, which also raised its stock rating to buy and set a new objective of $300, up from $170.

Impact on iPhone Shipments and User Demand

Woodring’s forecast indicates that Apple will ship close to 500 million iPhones over the next two years, surpassing the record cycle seen in 2021-2022. This optimistic projection follows the unveiling of Apple’s AI services in June during the Worldwide Developers Conference. Senior Vice President Craig Federighi described the new AI suite as “AI for the rest of us.” Post-reveal, Apple shares hit their first record high of the year and have risen by 17% since.

Woodring commented on the mounting demand for new iPhones as the iPhone 16 cycle approaches. He further emphasized his belief that fiscal year 2025 could mark the beginning of a prolonged device refresh cycle, fueled by the capabilities of Apple Intelligence.

Compatibility and Upgrade Necessity

According to Woodring, Apple Intelligence will significantly enhance utility for over 1.3 billion users within the Apple ecosystem, but it will only be supported by devices equipped with A17 Pro and M-Series chips. This means just 15% of Apple’s current user base will fully benefit from the new technology. He estimates that over 1.2 billion iPhones, iPads, and Macs will require upgrades to be compatible with Apple Intelligence.

Although the initial launch of Apple Intelligence will target US English-speaking iPhone users, Woodring sees the expansion to non-English functionalities as a critical growth driver over the next 12 to 24 months. This expansion could facilitate a return to year-over-year unit growth for Apple in fiscal year 2025, potentially leading to a major upgrade cycle in fiscal year 2026.

Record Sales in India

Highlighting Apple’s growing market presence, annual sales in India hit an all-time high of nearly $8 billion. This surge reflects the company’s strategy to assemble more devices locally and establish flagship stores, cementing its position in a rapidly expanding market.