Wall Street analysts think Apple's next big opportunity is something called the 'Ambient Paradigm'

"Investors don't seem to have much faith in Apple's future," UBS analysts Steven Milunovich and Benjamin Wilson wrote in a note distributed to clients on Wednesday.

Simply put, only 11% of Apple's market cap can be attributed to profits projected more than three years out, according to their calculation. It's the classic problem for Apple stock - it trades at a PE ratio much lower than tech giants such as Microsoft, Amazon, Google, and Facebook.

However, the UBS analysts think this means that there's a lot of upside to Apple stock that investors aren't factoring in. Sure, the iPhone is a huge hit and commercial success, but they see Apple laying the groundwork for "the next era of personal technology - the Ambient Paradigm."

"We consider the Apple Watch and AirPods similar transition products today on the way to an integrated user experience based on multiple products seamlessly connected. We call it the Ambient (present on all sides) Paradigm. It is Tim Cook's 'iOS everywhere,'" Milunovich writes.

He sees Apple's "other products" like the Apple Watch and AirPods evolving in coming years, with Siri acting as the glue, and potentially affecting industries like healthcare and education.

If you're constantly surrounded by Apple products and services, that presents a huge revenue opportunity for the computer maker, and also increases the possibility that users will feel locked into Apple's ecosystem.

The analysts warn that forecasting Apple's long-term future is difficult. After all, "Mac sales in 2001 or iPod units in 2007 didn't have much to say about where the puck was going."

UBS rates Apple stock as a buy with long-term growth upside, and sets a price target for the stock at $127.