Apple Expected to Launch Generative AI-Enabled Software Upgrade in June, Morgan Stanley Says

Apple (AAPL) is expected to unveil its first generative artificial intelligence-enabled software upgrade at the Worldwide Developers Conference in June, Morgan Stanley said in a note Friday.

“We believe that new [large language model]-enabled software features can help accelerate iPhone replacement cycles, especially given the component requirements to run AI in the cloud and on-device,” Morgan Stanley said.

Morgan Stanley said “every 0.25 year decrease in iPhone replacement cycles” is anticipated to drive an upside of roughly 6% to its fiscal 2025 iPhone unit and revenue forecasts.

The firm said it sees the software upgrade, and the expected launch of iPhone 16 in September, “as upside catalysts to help reaccelerate growth” in fiscal 2025.

Morgan Stanley said its fiscal 2025 revenue and EPS estimates for Apple are 1% to 4% higher than consensus and “remain largely unchanged” after the company released its fiscal Q1 results Thursday.

The firm maintained its overweight rating and $220 price target on Apple stock.

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