The market for Apple's main product, the iPhone, is maturing. But the stock is 'dirt cheap" and new products may be coming soon, analysts and investors say

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SAN FRANCISCO - Activist investor Carl Icahn said Tuesday that he bought more Apple shares after disappointing quarterly results from the technology giant.

"Just bought $500 mln more $AAPL shares. My buying seems to be going neck-and-neck with Apple's buyback program, but hope they win that race," Icahn wrote on Twitter Tuesday morning.

Apple shares fell 8% to $506.27 in afternoon trading. The company gave a weaker-than-expected forecast late Monday, sparking concern that the market for its main product, the iPhone, is maturing. Still, some investors and analysts said Apple shares are undervalued, despite such worries.

"Icahn sees the same thing I see: The shares are dirt cheap," said Jason Jones of tech hedge fund firm HighStep Capital, which owns Apple stock. "The question is when will they rally?"

Tavis McCourt, an analyst at Raymond James, downgraded Apple shares on Tuesday to "outperform" from "strong buy" and cut his price target to $550 from $700. However, a price of $550 would value Apple at about 13 times 2014 estimated earnings - a 15% discount to the average company in the Standard & Poor's 500 index, the analyst noted.

"We still view the stock as modestly undervalued," McCourt said. "This company is evolving from a growth company to a more mature business with very strong cash flow and amazing customer loyalty."