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Apple shares rose about 2% on Monday after Morgan Stanley raised its price target on the stock and named it a “top pick,” citing the company’s artificial intelligence efforts as a boost to device sales.
Last month, the iPad maker launched Apple Intelligence to entice customers to upgrade their devices to use the new technology, a move seen as a move to catch up with Alphabet’s Google and Microsoft-backed OpenAI.
Apple’s stock price has risen nearly 20% this year, reaching $235.37 in pre-market trading, and the company’s market value has reached approximately $3.6 trillion, the highest in the world.
“Apple Intelligence is clearly a catalyst for growth in iPhone and iPad shipments,” Morgan Stanley analysts said.
The new technology is compatible with only 8% of iPhone and iPad devices, while Apple currently has a total of 1.3 billion smartphones in use by customers, analysts said, adding that the company’s iPhone sales in the next two years may be close to 500 million units.
Morgan Stanley previously expected Apple’s annual iPhone sales to be between 230 million and 235 million units over the next two years, and the bank raised its price target for the company’s stock from $216 to $273.
The stock has an average buy rating and a median price target of $217, and has outperformed the S&P 500 this year, according to London Stock Exchange data.
Given the craze for GenAI smartphones, industry analysts expect Samsung and Apple to lead the recovery of the global smartphone market this year.
Apple sold 45.2 million smartphones worldwide in the three months to June, up from 44.5 million a year earlier, but its market share fell to 15.8% from 16.6% in the same period, according to IDC.
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