Apple Inc.’s price target was raised 24 per cent at Morgan Stanley to a level below only one other Wall Street bank, the latest sign of ever-increasing confidence in the iPhone-maker.

Morgan Stanley analyst Katy L. Huberty boosted her objective for the stock to US$368 from US$296, the second-highest among analysts followed by Bloomberg and implying upside of 17 per cent for Apple shares from Thursday’s near-record close.

Apple shares rocketed 86 per cent in 2019 and have extended those gains in 2020 after brokers including Credit Suisse and Argus Research raised their price targets. Optimism is increasing around the tech giant’s performance over the holiday season ahead of first-quarter results due on Jan. 28.

According to Huberty, who has an outperform recommendation on the stock, Apple should benefit from a potential reduction in the amount of time customers are taking to replace their smartphones. Features such as longer battery life and 5G technology will enable new functionality such as Augmented Reality, which along with “aggressive” iPhone trade-in offers imply that replacement cycles can’t increase much further, she wrote in a note.

But even as analysts have become more optimistic, with DA Davidson recently increasing its price target to a Street-high of US$375, the average price target among analysts tracked by Bloomberg sees Apple declining 6.5 per cent over the next 12 months from Thursday’s close of US$315.24.

For IT hardware companies in general, Morgan Stanley sees challenges ahead in 2020 as a recovery in demand remains elusive while risks to margins increase. The broker downgraded IBM to equal-weight from overweight on slowing revenue growth, and CDW to underweight from equal-weight on its high PC exposure.