Speculation is running high that Apple could reward shareholders with a big dividend or buyback when it reports first quarter earnings, but Hudson Square Research's Daniel Ernst said Thursday those payouts are not the reason to own the stock.
"At the end of the day, tech is about growth. If they were just doing the buybacks and they weren't growing earnings, then the stock wouldn't be up," Ernst said on CNBC's "Squawk Box." "You buy Apple stock because you think for the next five, 10, 20 years, they're going to continue innovating and growing top line and bottom line like they have for the last 15, 20."
Ernst noted that Apple revenues grew 32 percent year over year to $75 billion in the last quarter, outpacing Facebook's growth for the entire year.
Apple has spent $57 billion on buybacks over the last year, a high among companies in the S&P 500. It has issued dividends in the last two April reporting periods.
While that return to shareholder helps to put a floor under the stock, Ernst said, it does not explain the surge in Apple's price per share, which is up 60 percent over the last year at about $124.
Ernst cautioned investors about playing checkers over chess with Apple stock, saying it is "a long-term growth story." He warned that earnings face a tough comparison to recent quarters, which benefited from blockbuster sales of the iPhone 6.
"It's hard to say, 'Hey rush in. If you don't own it today, buy new shares of Apple,' but I think if you own it, you continue to own it. If there's a pullback in the market, there's an opportunity," he said.
—CNBC's Maneet Ahuja contributed reporting to this report.
Neither the analyst nor his family owns shares of Apple. Hudson Square Research does not own greater than 1 percent share of the stock, nor does it provide investment banking services to Apple.