Apple’s AI upgrades could drive major hardware cycle, says Morgan Stanley

The average iPhone owner has been holding onto their device for about 4.5 years since the iPhone 12 launched in 2020.

Morgan Stanley thinks Apple just found the thing that finally makes those owners reach for their wallets. Analyst Erik Woodring argues that Apple’s latest AI capabilities, particularly the overhauled Siri and Apple Intelligence suite, will trigger a multi-year hardware refresh cycle the likes of which the company hasn’t seen since 5G.

The upgrade math

Apple’s AI features require 12 GB of unified memory, which effectively draws a line in the sand between devices that can handle Apple Intelligence and those that can’t.

Morgan Stanley forecasts that Apple Intelligence could prompt nearly 500 million iPhone shipments over a two-year span, touching a pool of more than 1.3 billion active devices worldwide.

Woodring raised his price target for Apple to $360 in June 2026, citing the positive trajectory of the company’s AI platform developments. The firm views Apple as a top investment precisely because of this upgrade catalyst. And if the cycle proves as substantial and sustained as the bull case suggests, some analysts have floated the possibility of Apple’s stock reaching $440.

What Siri actually does now

The new Siri AI, introduced on June 8, 2026, incorporates multimodal capabilities, meaning it can process and respond to visual inputs alongside voice commands, and comes equipped with enhanced editing tools.

Why this matters for investors and the broader market

Morgan Stanley frames Apple’s AI push as the first substantial upgrade catalyst since the 5G era.

The services revenue angle is equally important. More devices running Apple Intelligence means more engagement with the broader Apple ecosystem: App Store purchases, iCloud storage, Apple Music, and whatever new subscription tiers the company inevitably introduces around its AI capabilities.

Investors watching this space should pay close attention to Apple’s quarterly shipment data and services revenue growth in the coming quarters.

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