Following another blockbuster quarterly earnings report, Apple's ability to continue growing may boil down to one statistic, analyst Gene Munster said Tuesday.
By Munster's calculation, for every 1 percent market share gain in the smartphone segment, Apple must sell an additional 17 million iPhones or increase revenue by 5 percent.
"If you think, 'Is this sustainable or not?' I think that's the core question to ask. Can they grow market share? If they can, this story can continue," Piper Jaffray's senior research analyst said on CNBC's "Squawk Box."
Cantor Fitzgerald analyst Brian White on Tuesday raised his price target on shares of Apple to $195 in the next 12 months, which would value the company at $1.2 trillion.
The current market value is about $772 billion. The stock hit a record high at the open Tuesday, before pulling back. (Click here for the latest price.)
Apple's second quarter earnings were dominated by better-than-expected handset sales. Apple said it sold 61.17 million iPhones, compared with a StreetAccount consensus estimate of 57.26 million. It also took market share from Google's Android mobile operating system, the company said.
"I think Google is going to lose share for the next few quarters," Munster said. "It won't be huge share. It will be a few percentages, but they're not going to be gaining share, so this is advantage Apple at least for the next six, nine months."
Apple controlled about 15 percent of the global smartphone market in 2014, according to information technology research firm Gartner.
The quarterly earnings showed the current iPhone cycle has legs, White told "Squawk Box." The iPhone 6 launched in September.
The company is also gathering momentum in emerging markets, he said. Apple said Monday it was now selling more iPhones in China than in the United States. Revenues from China also surpassed sales in Europe for the first time.
Given its relatively small market share, Apple still has plenty of opportunities, White said.
"One area I'll point out that's still on the horizon—and maybe it's China five years ago—is India. China still has a long way to go, but remember we have India," he said.
While iPhone sales underscored the strong results, iPad sales came in below estimates and continued to decline. The company said it sold 12.62 million iPads, compared with expectations of 13.94 million.
Taking into context Apple's quarterly iPhone sales, investors should not be concerned about declining iPad shipments, Munster said. Large-screen iPhone 6 and iPhone 6 Plus models may be cannibalizing Apple's tablet business, but soft iPad sales come at the opportunity of better smartphone margins, he added.
As for the upcoming Apple Watch, the category may initially compress margins as Apple works through its investments in new technology for the wearable device, White said. In the long run, he expects the smartwatch to contribute to expanding profit margins.
Apple will face tough sales comparisons to 2014 in the second half of the year, but investors have already factored in those comps, Munster said. Shares of Apple are up 20 percent year to date.
Apple on Monday reported second-quarter earnings of $2.33 per share on revenue of $58 billion. Analysts expected the tech giant to report earnings of $2.16 a share and $56.08 billion in revenue, according to a consensus estimate from Thomson Reuters.
During the same period last year, Apple posted earnings of $1.66 per share on $45.6 billion in revenue.
Apple is increasing its share repurchase authorization to $140 billion from the $90 billion announced last year. It is also boosting its dividend 11 percent to 52 cents per share. The planned program goes through March 2017, Apple said.
The company is doing right by using its cash reserve to reward shareholders, but investors would like to see a bigger merger or acquisition than its Beats Music buyout last year, Munster said. That purchase does not have much substance in the long term, he added.
—CNBC's Everett Rosenfeld contributed to this story.