Advertising campaigns displayed on large canvases cover facades of historic buildings and monuments on May 25, 2017 in Paris, France.

John van Hasselt | Corbis | Getty Images

Advertising campaigns displayed on large canvases cover facades of historic buildings and monuments on May 25, 2017 in Paris, France.

After a big pullback in technology shares Friday caused the Nasdaq composite to post its worst week of the year, some investors are concerned it may be the start of a bigger drop for the sector.

Apple shares are down 5 percent in the previous three trading days through Tuesday, representing a loss of more than $40 billion in market value.

But Credit Suisse still believes a big Apple rally is ahead.

The firm reiterated its outperform rating on the smartphone maker, saying its checks with Apple’s Asian suppliers point to strong sales ahead for the next iPhone.

“We remain convinced that the iPhone 8 product cycle will be significant in terms of driving multi-year unit growth, and we maintain our conviction on Apple’s ability to introduce new higher pricing tiers with an improved mix,” analyst Kulbinder Garcha wrote in a note to clients Wednesday entitled “Supply chain update, looking forward to super-cycle.”

The company’s shares are still one of the market’s best-performing stocks this year. Apple is up 27 percent year-to-date through Tuesday compared with the S&P 500’s 9 percent return in the same time period.

The analyst reaffirmed his $170 price target for Apple, representing 16 percent upside from Tuesday’s close.

Garcha said the firm’s checks with Asian suppliers revealed an iPhone production level increase to 156 million units from 145 million for the second half of this year.

“We note that Apple has historically raised iPhone prices along with key updates,” he wrote. “Given its affluent user base, a significant feature upgrade, limited price elasticity shown so far, as well as Samsung’s higher pricing points of the S8 devices, we believe our ASP [average selling price] assumptions could prove conservative.”

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