Colello has a fair value estimate of $120, below the current $126 trading level.
Watch: Are investors becoming too bullish on Apple?
The iPhone continues to be Apple's driver of growth. He wrote in his research note that the 99 percent customer satisfaction rate for the iPhone 6 and 6 Plus keeps the devices as the most important, and lucrative, in Apple's expanding product portfolio.
The expanding portfolio of course includes the Apple Watch. "We continue to view Apple Watch as a product category that will drive incremental revenue for Apple, but more important, will offer especially strong stickiness to the iOS ecosystem that will enable Apple to make repeat sales of high-margin iPhones to these customers over time," Colello wrote in his note.
"The easy money's been made at this point. There could be upside in the near term," he told CNBC's "Tech Bet." "But in general when you look at the smartphone market, two, three years out, once all the China mobile customers get their hands on it, now you have the larger screen, it's harder to see a lot of growth. The smartphone market is going to grow but most of it will be at the low end, not where Apple plays. So it will be interesting to see how much growth Apple gets on the high end. We think that will be relatively limited."