Apple growth depends on services: Analyst

"Apple's becoming very pervasive in consumer lives and that's what could take the stock to the next level," UBS's Steve Milunovich told CNBC's "Closing Bell."

Reaction to last month's strong quarterly earnings report, combined with some optimism about the Apple Watch, has fueled Apple's recent climb higher, he said. The stock rose about half a percent on Tuesday and closed just below $128 per share.

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Milunovich recently increased his Apple price target to $150 per share. As he looks for Apple to move higher, the "ecosystem is increasingly important," Milunovich said.

Offerings beyond hardware, including Apple Pay, will be vital to Apple's business model, he noted. Milunovich added that the company wants its iOS operating system "everywhere."

"Yes, they have to monetize through hardware, but services is really the glue to this story," he said. 

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He added that although he believes CEO Tim Cook has done well at Apple's helm, the company "is bigger than any one person at this point."

Despite his optimism, Milunovich believes some factors could pose risks to Apple. He noted that product delays and demand softened by macroeconomic weakness, among other factors, could tamper Apple's rise.