Following a huge week that saw Apple’s stock climb above $630 amid a fresh round of analyst upgrades, one analyst isn’t sold on the notion that smooth sailing is assured in the immediate future for the world’s most valuable company. BTIG Research analyst Walter Piecyk thinks Apple is set to report blowout earnings for the second fiscal quarter — he sees Apple earning $10.75 per share on sales of $40 billion in the quarter, versus Wall Street’s consensus of $9.81 and $36 billion — but he downgraded Apple’s stock to Neutral from Buy, noting that it’s time for investors to “take a breather.” Read on for more.

“We continue to maintain our view that Apple is the primary beneficiary of an accelerating growth trend in the global adoption of smartphones, considering global penetration of smartphones has not yet even reached 30%,” Piecyk wrote in a research note on Monday. “However, given the run up in Apple’s stock and the consensus estimates, we think now is a good time to more carefully consider how it will capitalize on the next and likely much larger leg of growth in the industry and prepare for the inevitable bumps that may occur on the way.”

The analyst believes Apple could run into some trouble starting in the third fiscal quarter that may eventually lead to a price cut on Apple’s iPhone, which currently drives much of Apple’s success due to huge margins. While numerous analysts see continued success for Apple’s highly sought-after smartphone, Piecyk believes carriers will soon grow less willing to sustain a $600 iPhone.

“Subsidies by post-paid wireless operators have fueled the growth of Apple’s $600 iPhone since its inception” Piecyk wrote. “Even in the pre-paid dominant markets of China and Europe, heavily subsidized iPhone’s are available to users willing to sign up for a contract. Wireless operators have been happy to subsidize smartphones to new and existing customers in order to provide a lift to the average monthly bill (ARPU) of their customer base, a metric which had been falling for the past three decades.”

The analyst continued, “The positive inflection point in ARPU was cheered by investors but the cost to drive that ARPU accretion is now starting to eat away at profitability and the performance of those stocks. Operators, unwilling to stall the pace of ARPU growth, offered generous upgrade policies including some that enabled a fully subsidized phone upgrade only one year in to a two year contract. We expect those policies to change as the faster upgrade rate of smartphones compared to legacy feature phones has been a costly surprise to post-paid and pre-paid operators, alike.”

BTIG sees Apple selling 33 million iPhones in the second fiscal quarter and 27.5 million in the third, when it could miss Wall Street’s earnings estimates as it did in the fourth quarter last year. “Specifically, we expect Apple’s iPhone sales to drop to 27.5 million units in Fiscal Q3 resulting in a revenue estimate that is $1 billion below consensus,” Piecyk noted.