On a year-to-date basis, shares of Apple are up over 70 percent. The iPhone maker recently became the first publicly listed US company to achieve a market capitalisation of $2 trillion.
Apple recently became the first publicly listed US company to achieve a market capitalization of $2 trillion, doubling its value in just over two years.
Despite the lofty valuation, Morgan Stanley has a target of $681 (around Rs 50, 575) on the stock, which is about 35 percent higher than its closing price as on August 24.
The global research firm's bull case sees the stock achieving those levels on continued services growth and a major iPhone update. It also raised its base-case price target for Apple to $520 from $431
According to analysts at Morgan Stanley, Apple's continued diversification has made it more like a consumer platform or tech stock than a cyclical hardware play.
Based on this, the bank said the Cupertino, California-based company still has "more room to run" as it still trades at a discount on a cash flow basis to peers in both sectors.
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On a year-to-date basis, shares of Apple are up more than 70 percent but the stock still has some steam left as long as its iPhone upgrades accelerate and services growth jumps to 21 percent. If the target is achieved, Apple's market valuation will jump to about $2.9 trillion within a year.
"Given greater confidence in the sustainability of long-term growth, investors could value Apple at enough of a premium to constitute such a run-up," analysts at Morgan Stanley said.
Late July, the iPhone maker posted a strong quarterly report card, which showed strong revenue, cash flow, and profit growth despite a 1 percent year-on-year decline in iPhone sales.