Apple’s shares surged by 2.5% to an all-time high following Morgan Stanley’s increased price target and endorsement of the tech giant as a “top pick” for investors, citing its advancements in AI technology.

In a strategic move to compete with Google and Microsoft’s OpenAI, Apple recently introduced Apple Intelligence, a new AI technology aimed at enticing customers to upgrade their devices. Analysts expect this innovation to drive up sales of iPhones and iPads significantly.

Currently, Apple’s shares have risen by nearly 20% this year, reaching $236.30 and pushing the company’s market capitalization to an impressive $3.62 trillion, making it the world’s most valuable company.

Morgan Stanley analysts believe that Apple Intelligence will be a key driver in boosting iPhone and iPad shipments. Despite being compatible with only 8% of Apple devices currently, with 1.3 billion iPhones in active use, the potential for future sales growth is substantial.

Morgan Stanley predicts that Apple could sell close to 500 million iPhones over the next two years, a significant increase from their previous projection of 230-235 million units annually within the same timeframe. As a result, they have raised their price target for Apple shares from $216 to $273.

According to data from LSEG, Apple’s stock has an average “buy” rating with a median price target of $217 this year, outperforming the S&P 500 index.

While Apple saw a slight decline in market share, selling 45.2 million smartphones globally in the last quarter compared to 44.5 million units sold during the same period last year, its market share dropped from 16.6% to 15.8%.

Overall, Apple continues to innovate and drive growth through its advancements in AI technology like Apple Intelligence, positioning itself as a top player in the tech industry for years to come.