Apple Inc. /zigman2/quotes/202934861/composite AAPL +3.75% could start to see a contraction in smartphone replacement cycles, Morgan Stanley's Katy Huberty said in a recent note to clients. She said that iPhone owners are now holding onto their phones for close to four years amid changes in how phones are priced and a slowdown in the pace of tech upgrades. "However, longer battery life and upcoming 5G technology, which will enable new functionality like augmented reality and combined with aggressive trade-in offers that subsidize upgrades for existing iPhone owners, suggest replacement cycles can't stretch much further and may in fact begin to shrink," she wrote. Huberty raised her price target on Apple's stock to $368 from $296. She also hiked her bull case to $515 from $407, which reflects 235 million iPhone shipments and a replacement cycles that's slightly less than six months shorter than it is in her base case. The base case bakes in a 3.7-year replacement cycle. Apple shares are up 34% over the past three months, as the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.34% has added 8.6%.