Currently trading at $231 as of Friday morning EST, BofA analysts have raised their price objective to $256. The predicted 11% price jump is due to “increased confidence of a multi-year iPhone upgrade cycle driven by an aging installed base and GenAI features,” the analysts wrote.

Placing second on the S&P 500 Index, Apple’s market capitalization of $3.49 trillion represents a staggering 7% of the index’s total weight. The consumer tech behemoth has enjoyed gains of 23% year-to-date, largely due to the anticipated launch of the iPhone 16 in September, that will offer on-device generative AI capabilities.

“Generative AI and AI are big opportunities for us across our products,” CEO Tim Cook said during the company’s earnings call for the second quarter of this year. The so-called “Apple Intelligence” features coming soon to iPads, iPhones and Mac, will involve generative AI features for writing, editing, image creation, and organization. 

The Bank of America survey on iPhone adoption was based on a poll of over 1 million respondents across the US, China, India, and the UK.

The upgrade cycle is critical for Apple. In Q2, iPhone sales accounted for half of revenue. Last month, Raymond James analyst Srini Pajjuri told Barron’s that for every 1% of installed iPhones that upgrade to newer models, Apple could see a 20-cent boost to its earnings per share. 

The survey found that during the Worldwide Developers Conference, Apple’s annual tech conference held in June, the percentage of respondents who reported plans to upgrade their smartphone this year increased by 4%, which the analysts describe as “bullish.” Moreover, the results found that a “significant number of iPhone users are still using older models,” with 73% owning an iPhone 13 or older. 

Adding to the analysts’ confidence in the multi-year upgrade cycle, the survey found that customer loyalty remains strong. Of current iPhone users, 58% intend to buy another another for their next upgrade, a rate higher than its competitors Samsung, Huawei, and Xiaomi. 

Moreover, in China, the drop in interest in Apple (and a corresponding increase in preference for Huawei) throughout March and April, appears to have been transitory. In March, fewer than 40% of Chinese respondents said they would buy an iPhone for their next upgrade. This aligns with an 8% year-on-year drop in iPhone sales in China during Q2—the steepest drop since the beginning of the pandemic. But the survey shows that now, Chinese users wanting an iPhone for their next upgrade has rebounded to 60%. 

However, Apple’s new Vision Pro—a mixed-reality headset retailed at $3,500—has had a rocky start. Market tracker IDC has predicted Apple may not even make half a million sales this year. On Friday, just one person queued in the London store to be the first to access the device. However, the BofA survey found consumer sentiment towards the headset is rising. In March, less than 20% of respondents said they were interested in buying it, but by June, that number had risen to 35%.