A Pre-Earnings Apple Upgrade

Colin Gillis, analyst at BGC Partners, upgraded Apple (NASDAQ: AAPL) heading into Tuesday afternoon's second quarter earnings report.Gillis upgraded the stock from from Hold to Buy and is using the recent weakness in share price to take advantage of potential upside in the stock. He believes that with so much negativity built into the stock, any positive news will quickly put shares back on track for the $500 level. While he still thinks that obstacles exist in the smartphone and tablet market, the pessimism surrounding the stock will lift as we approach the new product cycle refresh.Gillis does not think that Apple will return to its high of $705 this year -- or ever potentially -- but remains optimistic on shares below $400.He cited that the company has not negatively pre-announced second quarter results, indicating that Apple will likely come within its guidance, albeit the lower end. He also believes that the the third quarter guidance will be "tepid," but thinks this is already baked into the stock. Gillis also noted that Jony Ive may drive interest in the iPhone 5S for the unique iOS and user interface, even though the hardware may remain largely unchanged.Shares of Apple are currently up ~1.43 percent in mid-Monday trading.