Some Apple bulls will surely be disappointed with the Apple Watch's debut, but the device will make a significant contribution where it matters most—earnings, Hudson's Square Research's Daniel Ernst told CNBC on Tuesday.  In a "Squawk Box" interview, Ernst said the smartwatch might contribute 5 to 10 percent to Apple's bottom line in its first fiscal year. And while it is hard to recommend the stock given how much the market is up over the last two years, he said there are few companies innovating at Apple's level.  "I just don't find another company that I feel that comfortable with, not even from a safety standpoint," he said. "This is not just defensive. They are growing. They're an inexpensive stock. They're doing all the right things for shareholders. I don't know what's not to love about it."  Ernst spoke a day after Apple CEO Tim Cook unveiled the company's first smartwatch, at an event in San Francisco. The stock closed Monday at $127.14. It was flat in premarket trading Tuesday. (Click here for the latest price.)  Read MoreApple Watch has 18 hour battery, starts at $349  Ernst said he is less concerned with whether Apple will reach a $1 billion market capitalization than whether the company's price-to-earnings ratio improves.  "The only thing that really matters for Apple is earnings growth. That's why they need new products," he said.  Apple is a good choice for investors who want to own a stock that issues a steady dividend and is exposed to tech, media and telecommunications and priced cheaper than the market, he said.
The Apple Watch is sure to disappoint some uber bulls, but Hudson Square's Daniel Ernst thinks it will have a big impact on Apple's earnings.