Apple Remains the ‘Top Pick’ at Morgan Stanley, Which Sees AI Driving iPhone Sales

• Morgan Stanley kept Apple as its “Top Pick” for 2025 as the bank sees the tech giant’s artificial intelligence (AI) product driving iPhone sales.

• Morgan Stanley analysts said Apple is on the cusp of “its largest device upgrade cycle ever.”

• Morgan Stanley reiterated its “overweight” rating and price target of $273, above Apple’s record close near $248 on Thursday.

Apple (AAPL) remained Morgan Stanley’s “Top Pick” heading into 2025, with the Wall Street bank saying that the tech giant’s artificial intelligence (AI) product will drive more iPhone upgrades by consumers.

“We are bullish on … Apple Intelligence starting to accelerate iPhone replacement cycles in FY26,” the analysts wrote Friday in their report.

Apple “is on the cusp of its largest device upgrade cycle ever” because of the launch of Apple Intelligence, which they said would result in a record-breaking 2025/2026 fiscal-year cycle “that is underappreciated by the market today,” the Morgan Stanley analysts wrote.

The analysts also said they expect Apple to sustain its services growth at double digits and for the company’s gross margins to expand.

The analysts stuck with their “overweight” rating on the tech firm, noting that they remain bullish on its earnings power driving the stock price to their current target of $273 even as the stock hovers near its all-time high.

Shares of Apple were were down about 0.5% recently Friday at $246.76 after closing Thursday at a record high of $247.96.

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