Apple stock surged Monday after receiving a pair of upbeat reports from Wall Street analysts. The iPhone maker is seen benefiting from an upgrade cycle as it adds artificial intelligence to its products.
Morgan Stanley analyst Erik Woodring reiterated his overweight rating on Apple stock and raised his price target to 273 from 216. He also named Apple a "top pick."
Meanwhile, Loop Capital analyst Ananda Baruah upgraded Apple stock to buy from hold. He also increased his price target to 300 from 170.
In morning trades on the stock market today, Apple stock jumped to a record high of 237.23. It ended the regular session up 1.7% to 234.40.
AI Is 'Clear Catalyst'
In a client note, Woodring said Apple's artificial intelligence technology, branded Apple Intelligence, will boost sales of iPhones and iPads.
"Apple Intelligence is a clear catalyst for a multiyear product upgrade cycle," Woodring said.
He predicted AI excitement will drive record iPhone sales over the next two years.
"Our deep dive analysis into Apple's upgradable iPhone base, upgrade rates, new user growth, and iPhone model mix suggests that Apple will ship nearly 500 million iPhones over the next two years, 6% higher than the record fiscal 2021-22 cycle, while also driving 5% annual iPhone ASP (average selling price) growth" Woodring said.
He forecast iPhone shipments of 235 million units in fiscal 2025 and 262 million in fiscal 2026. The upgrade cycle will kick off with the launch of the iPhone 16 series handsets in mid-September, he said.
Woodring also raised his revenue and earnings targets based on his increased iPhone sales estimates.
Apple Stock Is A Tech Leader
Apple has an installed base of more than 1.3 billion iPhones, Woodring said. Also, replacement cycles have stretched to 4.8 years, creating a pent-up demand for upgrades.
Elsewhere, Loop Capital's Baruah said he turned positive on Apple stock on the potential for AI to drive iPhone upgrades.
"Apple has an opportunity the next few years to solidify itself as consumer's Gen AI 'base camp' of choice," Baruah said in a client note. Generative artificial intelligence applications also should boost iPad and Mac computer sales, as well as services, he said.
Apple's artificial intelligence offering "could cause adoption to catch like wildfire," he said.
Apple stock is on two IBD lists: SwingTrader and Tech Leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
