RBC'S 3 Reasons For Buying Apple, Other Than The Apple Watch

The last few months have seen a lot of hype getting built around Apple Inc.

's new product, Apple Watch. However, according to Amit Daryanani, RBC Capital Markets hardware analyst, that's not the only reason why investors should buy the stock. Daryanani was on CNBC recently to discuss the reasons one must buy Apple's stock apart from Apple Watch and the risks of Apple Watch turning out to be a dud. Reasons To Buy "We think you buy Apple not for the Apple Watch alone, but for 3-4 different other catalysts that the company has on its favor be that the iPhone 6, 6 Plus that seems to be going strong," Daryanani said. "The capital allocation that will happen right around the Apple Watch launch and the third part is gross margins, we think it's less talked about but will continue to surprise people on the upside. He continued, "And fourth I tell you Apple Watch I think expectations are fairly tempered at least for an Apple product among investors. So, this is likely to get […] neutral to a positive event as the product rolls out." Apple Watch: Moves The Needle Somewhat Daryanani was asked that based on what he said, there's now a possibility in his scenario analysis that Apple Watch can be a ‘negative'. He replied, "There's always a possibility about everything being a negative. So, there's certainly a risk and [I don't] mean to undermine it, but if you look at it, this even by more bullish expectations will account for 7 or a 8 percent of Apple's revenues or EPS." "So, it moves the needle somewhat, but by no mean does it take off the tailwind you have from the iPhone 6 cycle," Daryanani concluded.