VIDEO: Samsung Event Can Bring Big Boost to This Portfolio Holding

In today’s Daily Rundown video, Chris Versace explains why Tuesday's testimony by Federal Reserve Chair Jerome Powell is likely to be a non-event.

He also discusses why Wednesday's Samsung event could be a big one for portfolio holdings Qualcomm QCOM and, more likely, Universal Display OLED.

"The tagline for Samsung's event is 'unfold your story,' which means foldables ... are likely to be center stage at the event," Versace said. "And remember, why are foldables so important for Universal Display? Well, the simple answer is that they have far greater surface area for the display and that drives greater demand for Universal's solution set."

He also described how Hurricane Beryl can impact the portfolio.

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Transcript

CHRISTOPHER VERSACE: Hey, folks. Chris Versace here, Tuesday, June 9th, better known as Powell Day. I say this because today, Fed Chair Powell begins two days of back to back testimony in front of Congress. It's likely to be the event of today. I say that because there's very little in the way of fresh economic data. And as we've seen so far, no real earnings to speak of.

That will happen later this week when we, of course, get the June CPI and PPI reports Thursday, Friday, and we start to see companies like PepsiCo, J.P. Morgan, and the like start to report their quarterly results for the June quarter Thursday and Friday. So again, today's big focus is likely to be Powell and what he says. And yes, he will have some prepared remarks, and he will have to parry, if you will, some questions from Congressional leaders.

But the reality is that he's not going to say very much that is new relative to monetary policy and the timing of rate cuts. Last week, at the event that we discussed with you, with other central bank heads, Powell really laid out that the Fed is looking to see more good data sticking to the script, as it were. And of course, we haven't gotten a lot of fresh data this week.

Again, what we will get will be later in the week that CPI, PPI report. So it just stands to reason that he's not going to say a lot. Here's the thing, though. The stock market continued to power higher last week, this week, setting yet again, another fresh high last night for the S&P 500 and the NASDAQ composite.

Both remain overbought. And as we discussed yesterday with you, the S&P 500's PE valuation is as a result, that much more stretched. So if I was a betting person, I would say that if there were a risk in Powell's comments, it's likely that the market doesn't like what it hears about rate cut timing.

But I would give that, just based on the data that we've gotten over the last couple weeks, a very low probability. So the wind up here is I think Powell's comments are likely to be pretty much a non-event for the market, but we will have to focus in on them and parse them. So we will have some comments out later today on that.

But again, not really expecting anything incrementally new. Now, what we do have that will be new will be Samsung's Unpacked event tomorrow. I think of this as Samsung's equivalent to what Apple tends to do in the fall where it showcases its new hardware products. And indeed, Samsung is likely to show us some new smartphones, new wearables tomorrow at its Unpacked 2024 event.

We could very well see them discuss their Apple intelligence equivalent known as Galaxy AI. So we will, of course, be listening to that and how it is involved in the new hardware that it's bringing out, listening for what that could mean for Qualcomm. But I have to say that when I think about what we're likely to hear tomorrow, the big winner could very well be our shares of Universal Display.

I say this because the tagline for Samsung's event is Unfold Your Story, which means foldables, whether they're smartphones or perhaps a tablet, are likely to be center stage in the event. Now, we've been tracking the adoption in the industry for foldable displays across smartphones, tablets, and they are growing in terms of consumer adoption, but also in the number of models that are out there. Samsung is one of the larger players. So what it shows tomorrow will be important.

And remember, why are foldables so important for Universal Display? Well, the simple answer is that they have far greater surface area for the display, and that drives greater demand for Universal's solution set. So we'll be following that event tomorrow. Likely, it's going to be a positive, like I said, for Qualcomm. We'll be keeping it on a competitive front for Apple and what it's expected to announce later this year.

But the big winner out of the Samsung event likely to be our shares of Universal Display. Could we revisit our price target? Certainly we could, but especially if we happen to get Taiwan Semi's June revenue report tomorrow as well. We are also watching that report for incremental insight on demand for data center. Therefore, we'll be watching it for our NVIDIA price target, most likely our Marvell too. But I think we're going to stick with that one for now. But also Qualcomm and, of course, Universal Display, and potentially Apple as well.

So that will be another big report that we watch when it drops. The other thing that we'll be watching as we move through the balance of the week is going to be Hurricane Beryl. Now, we saw that it landed in Southern Texas and did a number there. A lot of destruction, power outages. But Beryl is expected to move through Indiana, Ohio, Michigan, I believe, and up into Canada over the coming days.

So we are going to continue to monitor reports, assess the damage, a couple quick thoughts on it, though. First, we are likely to hear companies talk about this when they report their June quarter results, potentially citing it in their guidance. So we'll have to factor that into our thinking. Of course, those that are more construction-related might have a bigger impact in their outlooks. That, of course, could be United Rentals, Vulcan Materials, Builders FirstSource in the portfolio, but here's the thing. Once the storm passes and the rebuilding effort begins, we will see incremental demand for those companies as well.

So it's likely to be a bit of a road bump, speed bump, if you want to call it that, hump in the road, some people say. But the reality is that the fallout of the storm is likely to be a positive or incrementally positive tailwind for those businesses. So if we see them pull back, it could be another opportunity for members to pick up some additional shares. We'll certainly be watching that for you. And with that, I would say, please, folks, be sure to check your emails, your alerts. We want to make sure you're getting our latest thoughts.

And of course, if we make any moves with the portfolio, we will want you right there with us. Also, just a quick reminder, today is Tuesday. That does mean that we will have office hours ranging from 4:00 PM to 5:00 PM today over in the forum. Please be there. Look forward to answering your questions. Nice camaraderie there. And it just allows for a little incremental insight into our thinking. So we hope to see you there. Again, 4:00 PM to 5:00 PM today over in the forum. Thanks for watching.

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