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Apple still has potential for upside surprise: Expert

Apple has not lost its shine, at least according to ARK Invest CEO Cathie Wood.

Though Apple shares have fallen nearly 10 percent since the start of October, Wood isn't shaken. In an interview with CNBC on Tuesday, she said the stock is currently in the bottoming phase. The company's installment plans and Apple Watch will cause an upside surprise.

Apple's installment plans allow users to pay for unlocked new iPhones for a monthly fee — starting at $32.

"This could turn Apple's revenue model into more of a recurring revenue model, which would really help their valuation," Wood told CNBC.

Apple watches are displayed in the Apple Store on 14th street in Manhattan, New York.
Astrid Stawiarz | Getty Images
Apple watches are displayed in the Apple Store on 14th street in Manhattan, New York.

In a note to CNBC, Wood refers to Verizon's fourth quarter results, which stated 67 percent of new phone purchases were on installment plans, compared to 25 percent one year ago.

Read More Apple set for slowest ever iPhone sales growth

Wood also thinks people are underestimating the Apple Watch's long term potential. Apple claimed more than 50 percent of global smartwatch shipments in 2015, according to a research firms Juniper and IDC.

"Apple seems to be insinuating itself into all kinds of relationships that I think we're going to find out about in the next year to two years," Wood told CNBC's "Tech Bet" on Tuesday. "The Watch can play an important role in healthcare, much more than people now anticipate."

Read MoreApple already owns half of the smartwatch market: Research

She added: "If we hit 15 million in cumulative units in Watch sales by the end this year or in this next quarter, that will be on pace with the iPad, which as we know turned out very well, especially in the beginning."

DISCLOSURE: Wood's firm owns Apple shares.