A proprietary UBS Evidence Lab survey of 4,000 consumers around the globe—1,000 of them in China—found such positive sentiment on Apple that Milunovich raised his price target to $125 per share, from $115 per share.
"The Chinese were more likely to want to buy an iPhone than in the other three countries," he said. "The retention rate of Apple is by far the highest of any handset vendor. And in China, they actually prefer the 6 Plus, the larger phone, which is good for Apple."
On CNBC's "Halftime Report," Milunovich said despite strong demand for Apple "everywhere," he was "a bit surprised" by the survey's even more optimistic results.
"Tim Cook has emphasized how important China is, and I think this supports it with some data," Milunovich added. "China is about 16 percent of Apple's revenue. Its margins have improved substantially, so they're very close to the corporate average right now. So, I think the outlook for Apple for now in China is very positive."
Milunovich also brushed off the idea that Apple might be actively looking to acquire other companies.
"People wonder should they go do a network? Should they buy Tesla?" he said. "They're very much about devices, and they've got a lot to do in the wearable space."
Milunovich said he believed Apple could sell another 10 million to 20 million phones.
"So, we think the Street's still probably too low on the phone numbers," he added.
Stephen Weiss of Short Hills Capital didn't buy the survey's results, noting the new iPhone models were still "very expensive."
Weiss also doubted the wisdom of banking on growth from China.
"Think about Coach. Think about Abercrombie," he said. "When we started pushing China as that story, that was the top of the stock. I don't think that'll be the case with Apple, but I'd throw that survey out the window. No offense, Steve. Good guy."
Disclosure: Apple is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.