Apple‘s shares jumped by nearly 2% on Monday after Morgan Stanley upgraded its price target and declared the iPhone maker a “top pick,” citing its AI efforts as a key driver for device sales. The investment bank believes Apple Intelligence, the company’s new AI technology, will significantly boost iPhone and iPad shipments, as it requires users to upgrade their devices to utilize the new feature.
Morgan Stanley previously expected Apple to sell between 230 and 235 million iPhones annually over the next two years. However, with Apple Intelligence’s compatibility limited to just 8% of current iPhones and iPads, the analysts believe Apple could sell close to 500 million iPhones in the next two years, as over 1.3 billion iPhones are currently in use.
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Apple Intelligence is seen as a major catalyst for device upgrades, which could lead to significant iPhone sales in the coming years. The company’s stock now has a market value of approximately $3.6 trillion, making it the highest in the world. The stock has seen a nearly 20% increase this year and currently holds an average rating of “buy” with a median price target of $217, according to LSEG data.