Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Monday, December 16th, and I'm your host, Kim Khan. Our top story so far,

Morgan Stanley says Apple remains its top pick heading into 2025, and the firm maintained its overweight rating

and $273 price target. Analyst Eric Woodring said they're still bullish on Apple intelligence

accelerating iPhone replacement cycles starting in fiscal 2026, double-digit services growth,

and gross margins expanding. The overweight thesis is that Apple is on the

cusp of its largest device upgrade cycle ever, as a launch and limited backward compatibility

of Apple Intelligence improves upgrade cycles and new user acquisition and accelerates

replacement cycles. This should result in a record-breaking fiscal 2025, fiscal

26 cycle that is underappreciated

by the market today.

All this should lead to Apple earning around 852 per share in fiscal 2026, about 4% above

consensus, he said.

Apple has outperformed the S&P 500 by 10 points over the last month, with the tech giant

now trading at all-time highs.

While the recent outperformance may be linked to market factors and short-covering,

the analysts are still bullish on Apple's ability to drive over 850 of earnings power in fiscal 2026,

which they think is also a factor helping to support near-term outperformance.

Woodring said they discussed five key topics with investors and her

bullish on Apple Intelligence started to accelerate iPhone replacement cycles in 26, limited

risk to China import tariffs, sustained double-digit services growth, and potential for

further iPhone gross margin upside. And speaking of AI, it's a big day for sci-fi fans. Both Arthur

...