Prudential Financial analyst Steven Fortuna thinks Apple's stock will outperform the average total return of its industry sector over the next 12 months.

Maintaining his Overweight rating, he has set the target price for Apple's stock at $55, writes Newratings.

He noted that 63 per cent of all iPods were sold in the last two quarters, suggesting that the iPod’s success is in its initial phase.

Prudential Financial is also positive about Apple's future. Analysts there say the iPod market is expanding at present, with iPod representing 76 per cent of all MP3 players sold in the US.

A rumour that Apple is considering using an Intel chip has also caused Apple's stock to soar. Such a move could make the machines less expensive, writes New York Daily News.

Software stocks also received a boost from Goldman Sachs analysts, who upgraded the entire sector.

Apple gained $2.21 to $39.76 last night, while IBM – which could suffer if Apple and Intel do form a partnership - rose 10 cents to $76.51.

Not slim pix

And its not only Apple's share price that will have CEO Steve Jobs smiling. The stock at his other company, animation studio Pixar, has rallied to its highest-ever level. It increased 4.5 per cent, or $2.13, to $52.81 last night.

Pixar's stock was also upgraded to Overweight by Prudential Equity Group, with a new price target of $75 a share,

Prudential said it decided to upgrade the stock based on expectations of higher ticket prices and ticket sales projections, and the belief the company eventually will produce more than one major animated film each year writes Forbes.

Pixar approved a 2-for-1 stock split in April.