Apple shares are being undervalued because investors are too bearish on the "ambient paradigm" – an era of technology where the company's iOS operating system is everywhere through different devices - according to a note by UBS on Wednesday.
Essentially, the investment bank is suggesting that traders aren't fully appreciating the potential success of future products which could create a much bigger ecosystem than what Apple currently offers.
To explain this, UBS said that the future consists of an "ambient paradigm" which Apple could win.
"The ambient paradigm consists of a many devices providing different input/output methods that can be flexibly utilized depending on the situation (sitting, walking, running, driving). Collectively these devices offer the capability of earlier products and more delivered as a seamless user experience," UBS wrote in a note.
"Devices become extensions of one another rather than discreet, computing platforms. It is an expression of what Tim Cook has described as 'iOS everywhere.'"