Apple shares surged to a record high overnight, lifted by stronger-than-expected demand for the new iPhone 17 lineup in the US and China.

The rally saw Apple close up 3.9% at US$262.24 (A$402.51), overtaking Microsoft to become the second-largest US company by market capitalisation, behind only Nvidia.

The jump followed data from research firm Counterpoint showing that early sales of the iPhone 17 series outpaced last year’s iPhone 16 models by 14% in their first 10 days on sale across Apple’s two biggest markets.

The base model iPhone 17 has proven especially popular in China, while the premium iPhone 17 Pro Max has driven momentum in the US, helped by carrier subsidies from AT&T, Verizon and T-Mobile.

Analysts say the figures suggest a long-awaited iPhone upgrade cycle is finally taking hold.

“We are now at the front end of Apple’s long-anticipated adoption cycle,” Loop Capital analyst Ananda Baruah wrote in an upgrade note, raising the firm’s price target to US$315. Evercore ISI also added Apple to its Tactical Outperform list, maintaining a US$290 target.

Apple’s recent rally marks its first record close since December, ending months of underperformance driven by tariff concerns and questions over its AI strategy. Shares have now climbed more than 50% since April, when they hit their 2025 low.

The company’s newly launched iPhone 17 series, alongside the slimmer iPhone Air, is being closely watched as a test of consumer appetite in a slower global smartphone market.

Counterpoint said the Air model has gained modest traction, outselling last year’s iPhone ‘Plus’, though demand remains centred on the base iPhone 17.

Apple is due to report quarterly earnings on October 30, with analysts expecting earnings per share of US$1.76 on revenue of around US$101.7 billion.

Stronger sales in China, where Apple has recently regained market share from local rivals, could provide a key boost as investors look for signs of sustained growth into 2026.