The days of Apple's amazing profits may be over

The S&P 500's profit margin growth over the past five years has been driven largely by tech, and one name in particular: Apple. Unfortunately for the market and for Apple, the days of exceptional expansion may be over.

That's according to David Kostin of Goldman Sachs, who wrote in a note Monday to clients that he expects margins to remain flat at 9.1 percent for 2016 and 2017.

"Many of the drivers of margin expansion during the past few decades appear to be behind us," Kostin wrote, listing former catalysts such as lower interest rates, lower taxes, a switch from manufacturing to services and technological innovations.

Since 2009, information technology has been responsible for about 48 percent of overall S&P 500 margin expansion. Apple alone has been responsible for 18 percent.

Read More The surprising case for $100 oil

But the next two years will likely see some new stars, according to Kostin's list of S&P companies expected to increase profit margins in both 2016 and 2017. Names such as Priceline, Netflix, TripAdvisor and Amazon are expected to increase margins by at least 100 basis points. Topping the tech list are Adobe, PayPal and Alphabet.

In comparison, Kostin expects Apple's profit margins to fall by 9 basis points in 2016 and grow by 30 basis points in 2017.

According to BK Asset Management's Boris Schlossberg, Apple's "lack of gusto" when it comes to profit margins is a result of unsatisfactory products, aside from the new iPhone.

"At this point, the watch is a bust, TV is a bust, the big iPad is not really flying off the shelves," Schlossberg said Tuesday on CNBC's "Trading Nation." "I don't see any other place where they're going to be able to get the kind of margin expansion that they've been able to get for the last five years."

Read More Uber talks growth, competition, and its future

And while Apple is up 7 percent for the year, Schlossberg said investors may be losing enthusiasm for the stock as well, at least compared with other tech outperformers this year.

But the broader market will also face problems now that companies have reached peak potential for squeezing out profits, said Larry McDonald of Societe Generale.

"The amount of creativity that CFOs have used to expand margins the last five years is something we've never seen and it's highly, highly unsustainable," McDonald told "Trading Nation" on Tuesday. "You can only do so much to expand margins."

Want to be a part of the Trading Nation? If you'd like to call into our live Wednesday show, email your name, number, and a question to TradingNation@cnbc.com

Videos

Trades to Watch

Trader Bios

About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more

Connect