Now that Apple's (AAPL) stock has crashed more than 35% from its peak, most Wall Street analysts are frantically cutting their estimates and reducing their price targets.

Most of them still rate the stock a "buy" so it's not as though everyone has given up and thrown in the towel.

This herd-like analyst behavior often frustrates critics, who complain that Wall Street analysts usually miss big turning points like Apple's.

In the case of Apple, though, a couple of Wall Street analysts were out in front of the stock's collapse. One of them has now upgraded it again, arguing that investors have actually become too negative about the company.

Walter Piecyk of BTIG Research recently upgraded Apple from Neutral to Buy.

Piecyk argues that investors have gotten way too pessimistic about Apple, with some even suggesting that it's the next BlackBerry (BBRY).

To be clear: Piecyk's not sounding the "all clear."

Piecyk thinks Apple will have a lousy first quarter, and will then issue "guidance" for the second quarter that is far below analysts' current estimates. That's bad news, obviously, and some investors will no doubt be startled and disappointed by it. But Piecyk thinks that most institutional investors have already factored this news into their assessments of the stock. And he thinks that, once expectations are reduced, the Apple news will be better from there.

Apple will release a cheap iPhone this year, Piecyk predicts. Apple might also even release an iPhone with a bigger screen. Piecyk also believes that even if these two products have much lower profit margins than Apple's current premium iPhone, Apple's overall profit margin won't drop too much.

Apple's profit margin is currently so high that, even if the margin drops a few points, the company will still coin money.

Piecyk thinks Apple's earnings per share will be flat to down this year versus last year. But the tens of billions of dollars of new revenue that Apple could generate from a cheaper and bigger iPhone should drive earnings growth next year, even at a lower profit margin. Wall Street will likely start to focus on that growth, Piecyk thinks, by the middle of this year.

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