Morgan Stanley says Apple's stock is 'under owned,' predicts more than 10% upside

Apple CEO Tim Cook arrives for Apples "The Morning Show" global premiere at Lincoln Center- David Geffen Hall on October 28, 2019 in New York.

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Shares of Apple are currently "under owned" by even the Cupertino-based tech giant's top investors, according to one Morgan Stanley analyst.

"Even the top 100 ... holders of Apple (stock) have a position that's less than the S&P 500 weighting," Katy Huberty, managing director and head of North American hardware tech research at Morgan Stanley, told CNBC at the Morgan Stanley APAC Summit on Wednesday.

Morgan Stanley has a current price target of $296 per share for Apple's stock — which ended Tuesday's session at $266.29 stateside. The firm's target represents a more than 11% jump in price from current levels.

"We still think the stock has room to run," Huberty said, citing recovering iPhone demand, inflecting services growth and Apple's quarterly share buybacks as possible catalysts for the share price.

Potential US-China trade war impact

Commenting on the potential impact of the ongoing U.S.-China trade war for Apple's outlook, Huberty said: "What's interesting is the company's margins have been flat to up since tariffs went into effect … in September."

"In the December quarter, again, gross margin guidance was better than expected," she said, adding that Apple likely has "done a lot of work with suppliers" to shift production of some of its products away from China if trade tensions between Beijing and Washington continue to escalate.

Apple is one of the companies especially vulnerable to the ongoing U.S.-China trade war, which has raged on for more than a year and seen tariffs being slapped on billions of dollars worth of goods from both Beijing and Washington. With assembly of its iPhones mainly done in mainland China, any new tariffs announced could impact the price of Apple's products.

For his part, Apple CEO Tim Cook said in June this year that the Chinese "have not targeted" the tech giant. Cook has also cultivated a relationship with U.S. President Donald Trump and his family as Apple seeks an exemption from tariffs that have been placed by Washington on imports from China.