Apple stock surged approximately 2% on Monday following an endorsement from Morgan Stanley, which raised its price target on the tech giant's shares and labeled it a "top pick," according to Reuters.

Last month, Apple introduced "Apple Intelligence," to compete with tech giants like Google and Microsoft-backed OpenAI. This initiative aims to incentivize customers to upgrade their devices to access the new AI technology, which analysts believe could significantly drive iPhone and iPad sales.

Apple's shares climbed to $235.37 before trading began, pushing the company's market value to approximately $3.6 trillion, making it the world's most valuable company by market capitalization.

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Morgan Stanley on Apple AI

According to Morgan Stanley analysts, "Apple Intelligence" is poised to be a game-changer for boosting iPhone and iPad shipments. 

The technology is currently compatible with only 8% of existing iPhone and iPad devices. With 1.3 billion smartphones currently in use globally, Apple could potentially sell nearly 500 million iPhones over the next two years. In fact, VCPost reported that its supplier Foxconn, is already preparing to ramp up production as demand for AI-enabled iPhone 16 increases.

In response to these developments, Morgan Stanley revised its price target for Apple's shares from $216 to $273. The stock maintains an average rating of "buy," with a median price target of $217, and has outperformed the broader S&P 500 index throughout the year.

Industry experts anticipate that Apple, alongside Samsung, will lead the global smartphone market recovery, particularly with the growing interest in GenAI-enabled smartphones. 

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