Apple's push into artificial intelligence may drive a wave of customers to buy new iPhones, Macs and other devices, according to a new analysis from Morgan Stanley. The investment bank predicts the company's AI features will trigger a significant hardware upgrade cycle, a development that could lift Apple's stock price.
The prediction from Morgan Stanley
In a research note, Morgan Stanley analysts argued that Apple's upcoming AI capabilities are strong enough to convince millions of users to replace older devices. They see the upgrade cycle as a major catalyst for Apple's revenue growth over the next several years. The bank did not specify a timeline or estimate the number of devices that might be sold, but it tied the expected boost directly to the company's AI software.
Why this cycle is different
Apple has gone through hardware upgrade cycles before — the iPhone 6 launch, for instance, or the introduction of the M1 chip in Macs. But the Morgan Stanley analysis positions AI as a new kind of driver. Instead of a bigger screen or a faster processor, the selling point would be features like on-device language models, smarter photo editing, and contextual assistants that work without sending data to the cloud. Those capabilities, the bank says, require newer processors and more memory, meaning older iPhones and Macs simply can't run them well.
The stock angle
Morgan Stanley's note also addressed Apple's stock. The bank sees the upgrade cycle as a reason to be bullish on shares, even after the company's recent run-up. A hardware refresh that touches a large chunk of Apple's installed base — estimated at more than 1 billion iPhones alone — would translate into higher revenue per user and stronger earnings. The analysts didn't give a new price target in the summary of their report, but they highlighted the AI upgrade as a key variable that could push the stock higher.
Apple has not yet announced specific AI features for its next operating systems, though it is widely expected to reveal them at its Worldwide Developers Conference in June. The company has been hiring AI researchers and buying startups in the space for years. The question now is whether the software will live up to Morgan Stanley's expectations — and whether consumers will actually pay up for a new phone that can do things the old one can't.
