Shares of Apple Inc. AAPL, +0.67% rallied 0.7% in morning trade Thursday, bucking the broader weakness in the stock market, after Morgan Stanley analyst Katy Huberty’s bullish call, citing early signs of iPhone stabilization in China. Huberty reiterted her overweight rating and $197 stock price target, saying she is now “positively biased” on Apple’s fiscal second-quarter ending this month. She said first and most important, despite a Chinese smartphone market that remains weak, Apple gained share of the installed smartphone base in January and February after losing share in December. “Second, February was the first month in half a year that our Asia team didn’t revise iPhone builds lower…, implying the most significant supply chain cuts are likely behind us,” Huberty wrote in a note to clients. She also said data suggests near-term iPhone estimates have “overshot” on the downside and replacement cycles have converged with PCs and are expected to stabilize. The stock has climbed 10.6% over the past three months, while the Nasdaq Composite COMP, -0.13% has advanced 10.5% and the Dow Jones Industrial Average DJIA, -0.10% has gained 6.6%.

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