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Gundlach: 'We Own Apple' (Update 2)

With the recent run in equity markets and Apple lagging behind, Gundlach noted, Apple could outperform. He likes the equity better than the bonds, of which Apple raised $17 billion in a bond offering in late April.

Despite his affinity for owning the stock, he noted the company's business is challenged. It's seen increased competition from the likes of Samsung and Google (GOOG), and the company is greatly over-believed. The products are not advancing, Gundlach said, noting he thought the iPad mini, which Apple announced in October 2012, was a "sure sign that the stock had peaked."

Gundlach pointed out the fact that Steve Jobs was against the iPad mini, though there are internal documents that Eddy Cue, Apple's senior vice president of Internet software and services, sent emails to Jobs discussing the need for a smaller tablet, which Jobs agreed with.

The big question for Apple is what product is the next great hit for the Cupertino, Calif.-based technology giant. There have been rumors that Apple will announce an iWatch later this year, as well as the oft-rumored Apple television set.

"I think at a 7 P/E, it's priced for no new product. It doesn't need a new product. It can keep selling a whole bunch of expensive new phones and iPads, and they'll be a cash cow," Gundlach said.

-- Written by Chris Ciaccia in New York

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