'Dean of valuation,' who recently bet against Apple, says the stock fell enough to make it a buy

Apple shares, which slumped nearly 20 percent in the month of November, are a good buy at current levels, said Aswath Damodaran, knicknamed Wall Street's "dean of valuation."

"I would buy Apple because, to me, the cash flows are there and I can see it continuing to go back to that steady state," the finance professor at NYU's Stern School of Business said on CNBC's "Squawk Alley" Friday.

"I mean, I sold short on Apple three months ago at $230. I'd be willing to buy at $175 or $180," Damodaran explained.

Apple was under pressure again Friday after closing lower at nearly $180 per share Thursday. The stock did mount a rare rally of late with the rest of the market on Wednesday.

Damodaran said the stock tends to either get high praises when there's an iPhone release or burned because of bad news.

The company is in "one of those pessimistic phases now," he said. But he added, "The story remains the same" as it has been the past six years.

"With Apple you might think you're paying 20 times earnings rate, 10 times earnings, but you're really not," Damodaran argued. That's because "you got 25 percent to 30 percent of the company trapped in cash, and that cash earns a 1 or 1.5 percent rate of return," he said. "Take cash out of the equation, Apple looks incredibly cheap."

Calling Apple a "slow growth cash machine," he did concede the tech giant does depend on selling smartphones. "The question with Apple though is how long can the earnings from the iPhone keep going," he added. "I mean, that's really the risk you face."

Apple in August became the first publicly traded U.S. company to hit a $1 trillion market capitalization. It then powered higher to an all-time intraday high of $233.47 on Oct. 3. Apple was able to weather October's stock market rout pretty well considering the plunge in tech stocks overall.

But the selling really caught up to Apple so this month, knocking more than $150 billion off its market cap since the peak, putting it into a tug-of-war with Microsoft for the title of most valuable.

For the first time in 16 years, Microsoft enjoyed two short reigns at the top earlier this week, and some analysts say the company could soon regain and maintain the lead for a while.

Damodaran said Microsoft CEO Satya Nadella deserves credit for leading the company "that seemed to be past its prime" to new growth opportunities outside the Windows and Office suites with a push into cloud services.

"I think the fact that Microsoft has caught up with Apple is just another piece of evidence that markets go through cycles," he said. "It's not going to be [just] one company winning forever."

Microsoft and Apple were both worth around $840 billion in market value Friday afternoon.

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