Apple Earnings Will Be Test for ‘Painful’ Sell-Off: Pro

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The pessimism that has pushed Apple's stock to its lowest level in nearly a year is "painful," a portfolio manager who owns the stock told CNBC Wednesday, adding that he hopes next week's earnings will salve investors' frayed nerves.

This week, Apple's shares sank below $500 for the first time since February 2012. Channing Smith, co-portfolio manager of the Capital Advisers Growth Fund, told CNBC's "Squawk on the Street" that the focus on Apple's margins is souring sentiment against the tech giant's stock.

"Back in September, Apple could do no wrong, and today they can do no right," the longtime Apple shareholder said. He said next week's earnings report could help restore confidence.

"If you get any type of the beat, we think you'll see a relief rally," Smith said, adding that the stock's fair value was well above $600.

As competitors like Samsung eat into market share for smartphones, and with its dominance in tablet devices under threat, Apple has seen key metrics like its margins shrink. Smith said he was still confident in Apple as an investment.

"Apple is the greatest technology company we've ever seen.There's still tremendous growth, the fund manager said. "We think Apple will continue to gain market share, will continue to grow earnings at 20 percent, and the valuation … has nowhere to go but up," Smith said. He called Apple's current valuation "extremely cheap."

—By CNBC's Javier E. David

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Disclosures:

Channing Smith is a major Apple shareholder.

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