Apple  (AAPL)  shares were active in early Friday trading, and withing striking distance of their all-time highs, following a bullish note from a top Wall Street analyst who predicted the stock's impressive second half rally earlier this year.

Apple shares have added around $650 in market value since the group's AI event earlier this summer when the tech giant outlined its ambitions to infuse the new technology into its iPhone 16 and its broader suite of consumer-focused hardware and online services.

The stock has firmly outperformed the Nasdaq and S&P 500 over that time, rising around 26.1% since the June 10 event against gains of 16% and 13.2% for the respective benchmarks. It's also reclaimed the title of world's most-valuable company it lost to AI chipmaker Nvidia NVDA in early November.

Apple is betting that its new AI technologies, dubbed Apple Intelligence, will prompt a big increase in handset upgrades as consumers look to adopt the new features, which will be available only in the new iPhone 16 and last year's iPhone 15 Pro.

The rollout of those features, which include upgrades to its Siri voice assistant, an AI image generator and notification summaries, will take several months, and will be fully available only in certain markets, as Apple deals with language, tech and regulatory challenges.

Here's what Morgan Stanley says about Apple shares now.

Apple analyst updates outlook on iPhone and AI

Morgan Stanley analyst Erik Woodring said he sees Apple stock gains extending into the coming year as well, and he reiterated that Apple remained the investment bank's 'top pick' heading into 2025.

"Over the last month Apple shares have outperformed the S&P 500 by 10 points" and are now trading at all-time highs," said Woodring, who reiterated his $273 price target and 'overweight' rating in a note published Friday.

"While we believe part of Apple's recent string of outperformance is tied to market factors and short covering," he wrote, "we remain bullish on Apple's ability to drive over $8.50 of earnings power in [the 2026 financial year], which we believe is also a factor helping to support near-term outperformance, with investors potentially pricing in the next iPhone cycle further ahead than past cycles."

Related: Apple reveals new AI chip building partner, and it isn't Amazon

Apple launched its iPhone 16 in September, touting a series of new AI-powered features that it said would drive handset sales into the holiday period and beyond.