Apple (AAPL) closed at $469.25, down $6.93 or 5.4 percent on the day.
Icahn told CNBC on Wednesday he added to his already sizable position because the investment is a "no-brainer." The stock is relatively inexpensive and has upside potential.
"It's just extremely cheap," Icahn said on " Closing Bell ," noting that by his calculation, Apple is inexpensive by the numbers.
If Apple's cash reserves are discounted, he said Apple has a market capitalization of around $300 billion, with earnings before interest, taxes, depreciation and amortization at roughly $50 million, generating a return of about 18 percent, or 5.6 times earnings.
Should Apple execute a share buyback of $150 billion, though, he calculates investors would only pay three times EBITDA for a 33 percent return or so.
Though Icahn admitted Apple's stock could continue to decline in the near term, he thinks it's likely to climb higher over time. He went so far as to list it as one of his finer investments, a bold statement for the hedge fund manager who also owns shares of such companies as Netflix (NFLX), Dell (DELL) and Chesapeake Energy (CHK), among others.
"I really think Apple is one of my best right now," Icahn said.
Icahn continued to advocate for a share buyback, calling it "ridiculous" that the company wouldn't take advantage of low rates to borrow the money and execute the transaction. Again, he called it a "no-brainer."
Though Apple's latest product announcement, the iPhone 5S and multicolored iPhone 5C, drew mixed reviews from consumers and investors alike, Icahn expressed little concern. After decades of asset management, Icahn said he's learned not to micromanage.
"Don't go in and tell somebody else how to run their business," Icahn said, "I look at it from the big picture. I just look at what they're doing. They're one of the best brands. They are building revenue."
Icahn went on to discuss his other positions.
Though he wouldn't guess where oil is headed, Icahn said he's bullish on Chesapeake because it has good assets and is being well run by CEO Doug Lawler following a recent reorganization effort.
Icahn slammed activist investor Bill Ackman's skepticism of Herbalife. Ackman has a $1 billion short bet against the company.
"I think Bill Ackman is completely wrong ... it is not going to be closed down and the company has a great growth rate and I think it's still very undervalued," Icahn said. "And I think Ackman has no idea what he's talking about."
Earlier this year, Ackman and Icahn got into a very public flight over the company, but Icahn said "I don't even read what he writes anymore."
On Netflix, Icahn said the company "isn't what it was," but added he thinks CEO Reed Hastings is doing a "great job." He also disclosed he has yet to sell any shares of the video streaming service company.