Apple is undervalued and a massive buyback of shares is a "no brainer," billionaire investor Carl Icahn said on Thursday, adding that he could consider a proxy fight if the company did not buy back more shares.
"If they don't do it, we'll test the waters and see if the shareholders want us to do it and if we could win," Icahn told CNBC. "We've said we're not going away. I've said that to (CEO) Tim (Cook) and I'll say it again."
(Watch: The full Icahn interview)
Icahn also said his basis in the stock was about $440 a share and that a buyback would be compelling even at $550 or $570 a share.
"At these values we think it's still very cheap," he said. "I do presently intend to buy it."
Apple shares rose 1.2 percent to $531 in midday trading. At those prices, Icahn's stake in the company represents a profit of about $428 million, based on a holding of around 4.7 million shares. (What's the stock doing now? Click here)
(Read more: Icahn-Netflix trade teaches a lesson)