What Apple needs for a $500 stock: Pro

Apple's stock price has more than 10 percent upside on known factors, UBS analyst Steve Milunovich said Wednesday.

"Clearly, the company is not out of the woods," he said. "The quarter was better than expected, with both revenue and margins at the higher end of the range. And yet there are a still a lot of answers that we need to really believe this is a stock that's going to take off."

On CNBC's "Fast Money," Milunovich said that UBS had a $500 price target on shares of Apple.

"I do think it's a trading stock," he added.

Apple stock traded at $442.13 midday, up 5.5 percent.

(Read more: Stocks struggle for direction after earnings; AAPL spikes 6%)

One area of concern Milunovich noted was Asia, which accounted for "weak" results in Apple's quarterly earnings report.

"We do believe that Asia's critical to Apple's future growth," he said. "That was a little bit soft. We would like to see that come back."

Milunovich said that Apple faced increasing competition from Google's Android mobile platform in the region.

(Read more: 'Something big' ahead for Google?)

"Android, of course, is much stronger in Asia than it is in the Western world, and there's a lot of competition there," he added. "At the same time, I do think Apple is an aspirational brand, and if they can bring in newer product at similar price points to the 4 and the 4s, that could be very attractive.

"We're still waiting to see if they hook up with China Mobile. That would be very significant to Apple's earnings if it's a subsidized phone."

For now, there would likely be a midrange iPhone from Apple, as well as a new flagship model, but no large-screen phone/tablet hybrid, Milunovich said.

(Read more: Apple stock going to $600, pro says)

"I think there's 12- to 24-month development cycles for Apple, and I think they got caught by the demand for so-called 'phablets,'" he said. "So, if there is one coming, I would think it's going to be no sooner than mid next year."

Milunovich noted that Apple's services, such as iTunes, accounts for approximately $17 billion in annual revenue. That, he added, provided support for a $500 share price, "based on what we know today."

"To go higher, we're going to have to see some major new product wins," he also said.

— By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On July 24, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is long AAPL; Jon Najarian is long JPM ; Jon Najarian is long CSCO; Jon Najarian is long JNY; Jon Najarian is long NTAP; Jon Najarian is long VMW; Jon Najarian is long EMC ; Jon Najarian is long FFIV; Simon Baker is long AAPL; Simon Baker is long JPM; Simon Baker is long GS; Simon Baker is long WFC; Simon Baker is long FB; Simon Baker is long BRCM; Simon Baker is long BA; Simon Baker is long C; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long F; Stephanie Link is long HON; Pete Najarian is long AAPL; Pete Najarian is long BAC; Pete Najarian is long C; Pete Najarian is long YHOO; Pete Najarian is long SBUX; Pete Najarian is long NFLX; Pete Najarian is long FB; Pete Najarian is long BBRY ; Pete Najarian is long F; Pete Najarian is long C; Steven Milunovich is long AAPL.