Here's Our Plan if Apple Intelligence Doesn’t 'Wow' Investors

*Should Apple underwhelm with Apple Intelligence at Monday's “Glowtime” event, here’s our plan for Apple, Qualcomm and Universal Display shares

*A warm reception for Huawei’s tri-fold smartphone is another positive for Universal Display

Dust off those weekend cobwebs: Monday is a day many in the market have been looking forward to – Apple’s AAPL “Glowtime” event that begins at 1 p.m. ET.

We have no major corporate earnings this morning and with no major economic data points out until the July Consumer Credit Report at 3 p.m. ET, it’s fair to say that the reaction to Apple’s event will be a major force in how the market closes. Remember, AAPL shares account for 6.95% of the S&P 500, just under 12% of the Nasdaq Composite, and 8.15% of the Nasdaq 100 (NDX). For those who are curious, its weighting on the Dow Jones Industrial Average is far, far lower, near 1%.

Over the weekend, Bloomberg’s Mark Gurman reported that — while Apple will showcase Apple Intelligence today as well as introduce its latest iPhone models, updated ones for Apple Watch and some new AirPods — the initial version of Apple Intelligence will be missing “many features,” including ChatGPT, announced in June. Gurman argued that a staggered approach to rolling out Apple Intelligence features may not produce a hot and heavy upgrade cycle out of the gate. Another stumbling block is word that, initially, Apple Intelligence may not be available in the eurozone and China.

Our Plan for Apple, Qualcomm Shares

These are some cautious words, but many a time the Apple rumor mill has come up short or at times plain wrong. Gurman’s comments, however, confirm our thinking that if Apple does not wow with Monday's event and provide a catalyst to spur iPhone adoption, we’re likely to see AAPL shares trade off.

The shares have held up rather well of late, but that’s likely been predicated on Monday's event. With AAPL shares hovering at their 50-day moving average, the next level of support shows up near $205 to $206, better known as the 100-day moving average.

Back in early August, the shares came close to that support level, but ultimately recovered as did the market. This time around, the relative strength index for the S&P 500 is still only near 41, so still somewhat far off from a reading of 30 or below. While closer to that level than the S&P 500, the Nasdaq Composite’s 37.42 figure as we kick off this week says it too has a way to go before becoming oversold.

With all of this in mind, we’re going to digest Apple’s event and, if it leaves folks wanting, we’ll let Apple shares absorb that and, if they find their way to being oversold or close to it, we may pick up a few shares. If the event goes swimmingly for Apple and reception is favorable or better, the almost-4% position size near 4% of the Portfolio’s assets has us in good standing.

When we think about Apple, the iPhone and events like Monday's, we have to also think about the halo effect on the company’s supply chain. For us, that means Qualcomm QCOM and Universal Display OLED.

QCOM shares will likely mimic what we see in AAPL shares and, with that position starting this week off at 3.7% of the Portfolio, we already have some room to add more shares. Similar to our plan for AAPL shares, we’re inclined to let QCOM shares absorb the impact of Monday's event before making any moves.

Universal Display: Huawei’s Tri-Fold Smartphone Is Hot Out of the Gate

Turning to Universal Display, Apple’s event will have an impact but it may not be as severe. The reason for this is that Chinese smartphone company Huawei has received more than 2.7 million pre-orders for its tri-fold smartphone, the Mate XT, since Saturday. This expands Huawei’s position in the foldable category, and as we’ve discussed before about this industry, model designs that catch on tend to be followed by other vendors. This likely means Samsung and others in the foldable space are or will soon be working diligently on tri-fold models.

Much like the foldables already in the market, these larger display surface areas will drive a multiplier effect for Universal’s organic light-emitting diode solutions compared to smartphone shipments. Perhaps this will accelerate Apple’s efforts as well.

We’re also seeing organic light-emitting diode adoption continue across the smartphone industry, and ramping in the tablet and PC space as well. We continue to see a bright future ahead for OLED shares. Similar to AAPL shares, OLED shares are far from being oversold, but if they reach that level amid a wider market pullback, that would be a wonderful place to pick up more shares.

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At the time of publication, TheStreet Pro Portfolio was long AAPL, QCOM and OLED.