With its stock surging 70% over the last year and its market cap surpassing $750 billion, Apple (NASDAQ:AAPL) can seemingly do no wrong in investors' eyes. Yet it was only two years ago that Apple stock, after reaching what were then new all-time highs, lost nearly 50% of its value as investors' confidence turned to skepticism. Could such a situation present itself again? And if so, what might initiate the sell-off? Read on to see the major risks facing Apple today.

Go big or go home
With more than $200 billion in annual revenue, Apple is a behemoth that needs big hits in big markets to not only spur growth but also to simply sustain its current revenue base. That's why so much is riding on the upcoming launch of the Apple Watch.

The Apple Watch was officially released on April 24, and Apple began taking preorders two weeks earlier. Estimates range widely for preorders (between 1 million and 3 million units) and first-year sales figures (from as low as 8 million to as high as 41 million units). Should Apple Watch sales land at or below the bottom of Wall Street's expectations, we could see a sharp sell-off in Apple's stock.

Fueling that fear are early reviews that have been less than flattering, with critics highlighting Apple Watch's limited functionality and poor battery life when compared to other leading smartwatches.

Still, others have a far more bullish view on the Apple Watch, with some, such as Asymco's Horace Dediu, predicting demand will far surpass current expectations for Apple's $10,000 -- and ultra-high margin -- gold watch.

While Apple investors will scrutinize these sales figures, it isn't just Apple's revenue and profit that will be affected by the success of the Apple Watch; Apple's reputation for innovation is also at stake. Skeptics like to say that Apple hasn't had a game-changing new device since the debut of the iPad in 2010. I'd argue that recent creations such as Apple Pay and ResearchKit certainly qualify as game changers, but nevertheless, a big hit in a new market such as wearables would further help to crush this criticism.

iPhone dependency
A successful launch of the Apple Watch could make a small but meaningful contribution toward diversifying the company's revenue streams. Right now, Apple is highly dependent on only a few major product lines, with the iPhone alone accounting for more than two-thirds of Apple's total revenue in the December quarter. Disappointing iPhone sales figures -- particularly during a launch quarter – are an ongoing risk and could be devastating for Apple and its stock.

Bulls, however, would argue that this has been the case since the iPhone's debut in 2007 -- and they're correct. While Apple's reliance on the iPhone is a risk that should not be overlooked, the company has shown an incredible ability to innovate and iterate – creating an entirely new iPhone form factor every two years and improving the device enough in the years in between to continue to fuel demand and drive iPhone sales higher.

In addition, many iPhone users have purchased other Apple products such as Macs and iPads. This, combined with years of app purchases that would be lost should users switch to a competing OS, help to lock iPhone users into Apple's ecosystem by increasing their switching costs. Many Apple bears underestimate the power of this "halo effect" -- much to their detriment.

iPad saturation
Some believe Apple's second-most-important product (by revenue) -- the iPad -- is approaching saturation. Apple finished fiscal 2014 with three consecutive quarters of declining iPad sales, and iPad unit sales fell a sizable 18% year over year in Q1 FY15.

Analysts note that the iPhone 6 and 6 Plus, with their larger screens, may be cannibalizing iPad sales, particularly for the iPad Mini. Bears will also highlight the success of Google's Chromebooks, which are earning sales (particularly in the education segment) at the expense of Apple's iPad, thanks to their low cost and greater functionality.

While these threats are not to be dismissed entirely, several factors point to the possibility of a substantial recovery in iPad sales in the near future. As my colleague Adam Levine-Weinberg explained, although the replacement cycle for iPads appears to be far longer than the typical two-year iPhone upgrade cycle, many early iPad buyers are now using devices that are 3 to 4 years old. As they begin to upgrade their machines, Apple's iPad sales figures should receive a boost.

Further helping to drive iPad sales will be Apple's partnership with IBM. IBM is creating industry-specific iOS apps and using its existing sales force to market iPhones and iPads to its corporate clients. Combined with the rumored iPad Pro, this partnership should help Apple take share in the massive enterprise segment in the years ahead.

Is Apple a buy in spite of these risks?
All told, there are risks to any investment, and even the mighty Apple is not impervious to them. Yet I believe the Apple Watch will be a success, and that both iPhone and iPad sales will continue to exceed investor expectations the years ahead. Apple remains one of the largest positions in Tier 1, the real-money portfolio that I manage for The Motley Fool, and -- even in light of the risks -- I expect that to remain the case for years to come.

Joe Tenebruso is portfolio manager of Tier 1 Investments, a Motley Fool Real-Money Portfolio. You can connect with him on Twitter @Tier1Investor. Joe has the following options: short January 2017 $100 puts on Apple and long January 2017 $90 puts on Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.