Hedge fund manager Daniel Niles believes there's too much optimism surrounding Apple stock.
Niles, founding partner at AlphaOne Capital Partners, is worried the China trade war could hit the iPhone maker's bottom line and shock investors who are capitalizing on its record run.
"People are forgetting that China is 18 percent of their revenues in the most recent quarter," he said Wednesday on CNBC's "Trading Nation. " "China is actually driving their business. So if you think about what's going on right now with the trade spat that we have going on with China, I mean this is something that should really concern you."
Niles, who is underweight or short the stock depending on his particular portfolio, sees the impact directly affecting iPhone sales.
"It wouldn't surprise us to see smartphone growth in total being affected going forward. And, if you look at Apple itself, it's not like iPhones are growing that well," he added.
"China is getting blasted, and a lot of the U.S. stocks are going down with it. This is the name for now that seems immune, but let's not forget what happened to Facebook not that long ago, and that surprised people, " Niles said. "It's something you need to pay attention to, and certainly not a name that we like."
Apple declined to comment on Niles' warning. The company said it had nothing to add beyond what was in its latest earnings call. On that call, Apple CEO Tim Cook said the tariffs could have "unintended consequences" for consumers and the economy. However, Cook didn't provide details about how tariffs could directly impact Apple.
Shares of the $1 trillion tech company have soared more than 30 percent this year.