After hitting a new all-time high of $134.54 the day after its Q2 earnings report in April, Apple (NASDAQ:AAPL) shares have stumbled. Last week, Apple stock briefly went into a freefall that sent it as low as $120, though it has rallied since Friday, rising as high as $127 on Wednesday morning.

Opportunistic investors who bought the dip last week are already sitting on nice gains. However, even if you missed that chance to buy Apple stock on the cheap, it's not too late to profit from this tech juggernaut. Apple still looks like a good deal, and the stock could be ready to start moving higher again after its upcoming earnings report.

The real key to Apple's success
The Apple Watch went on sale last quarter, and speculation about sales of Apple's first all-new product in five years has attracted lots of media attention. Recently, Apple Watch skeptics have become bolder, though they appear to be overstating the case for weak demand. But on the flip side, there are still plenty of bulls who see Apple Watch demand remaining strong.

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Investors may be focusing too much on the debate about Apple Watch demand. Photo: Apple.

The depth of demand for the Apple Watch could have a significant impact on Apple's results during the next few quarters, particularly around prime gift-giving times like Christmas and the Chinese New Year.

However, for Apple's recently ended third quarter, both bullish and bearish analysts' Watch sales estimates are only a few million units apart. That's equivalent to a little more than $1 billion, which actually isn't that much for a company of Apple's size.

The iPhone will still be the X-factor in Apple's upcoming Q3 earnings report. And strong sales for Apple's signature product could help the company deliver another solid earnings beat no matter how many Watches it sold last quarter, igniting another Apple stock run.

Another earnings beat on the way?
Expectations for Apple's earnings report have been rising. On average, analysts think that Apple generated slightly more than $49 billion of revenue last quarter. That estimate might seem aggressive on its face, as Apple forecast Q3 revenue of $46 billion-$48 billion back in April.

However, Apple's guidance has been quite conservative recently. Apple has exceeded the high-end of its revenue guidance range for three-straight quarters, by an average of $4.4 billion per quarter. Another revenue (and earnings) beat of this magnitude seems quite plausible.

While a slew of analysts have raised their iPhone sales estimates during the past few months, the average estimate among more than a dozen analysts polled by Fortune still sits at 48.4 million.

But as I explained last month, several factors are likely to support Q3 iPhone sales. With relatively incremental changes expected in the next iPhone, consumers are less likely to hold off on iPhone purchases. Apple also entered last quarter near the low-end of its channel inventory target. Finally, the arrival of the Apple Watch in stores last month may have driven higher traffic, and thus some extra iPhone sales.

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Demand for the iPhone 6 has remained superb. Photo: Apple.

As a result of these factors, I believe Apple shipped at least 50 million iPhones in Q3. Even the highest analyst estimate -- 56.28 million iPhones shipped, according to Credit Suisse -- seems quite plausible in light of the steadily rising usage shares of the iPhone 6 and iPhone 6 Plus.

Based on the iPhone's average selling price of more than $650 as of Q2, a shipment figure near this bullish estimate could be worth about $5 billion in incremental (high-margin) revenue compared to the average analyst estimate. That would be enough on its own to fuel a big earnings beat -- which, in turn, could get Apple stock moving again.

Ignore the sideshow
In the long run, the Apple Watch could become another solid business for Apple. Along with the Mac, iPad, and Apple's services segment, it could provide some much-needed revenue diversity for Apple.

However, in the short run, it's a distraction more than anything else. The big debate about the Apple Watch's popularity has distracted investors' attention from Apple's key profit growth driver: the iPhone. As a result, investors have sent Apple stock down, even as the iPhone sales picture appears to be stronger than ever.

If Apple managed to ship significantly more than 50 million iPhones last quarter, it's likely to deliver a big earnings beat on Tuesday. Considering Apple stock's muted performance during the past three months, that could be just what's needed to kick-start another big run.

Adam Levine-Weinberg is long January 2016 $80 calls on Apple, short January 2016 $120 calls on Apple, and short January 2016 $140 calls on Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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.