We're Adding to a Tech Position on Recent Weakness
Our position in the stock is one we want to build, especially after the recent pullback.
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| Symbol | Transaction Type | #Shares Traded | Recent Price ($) | Shares Owned After Trade | % Porfolio |
|---|---|---|---|---|---|
OLED | Buy | 165 | 158 | 720 | 2.75 |
* We are adding some shares of Universal Display after the pullback over the last month.
* We are getting confirmation for the AI-enabled PC upgrade cycle, and the smartphone one should emerge soon.
After you receive this Alert, we will buy 165 shares of Universal Display OLED at or near $158. Following the trade, we will own 720 OLED shares, accounting for roughly 2.75% of the portfolio.
I’ve been talking with you about the expected AI-led upgrade cycle for smartphones, PCs, and other devices, one that would benefit our shares of Apple AAPL, Qualcomm QCOM, Universal Display, and Microsoft MSFT. It seems that thinking is gaining support.
On top of Dell’s DELL recent earnings call comments that spoke to that, research firm Canalys forecasts that close to 18% of total personal computer shipments globally, roughly 48 million units, will be AI-capable PCs this year.
That number is expected to exceed 100 million units, 40% of all PC shipments, by 2025, and in 2028 it forecasts PC vendors will ship 205 million AI-capable PCs. That’s a heady 44% compound annual growth rate between 2024-2028. When I look at these forecasts, I tend not to focus on the absolute figures but rather the direction and it is a favorable one for our holdings.
We are likely to see similar forecasts emerge for the smartphone market in the coming weeks and months. Those will be positive catalysts, particularly for our “buy the bullets, not the guns” smartphone plays that are Qualcomm and Universal Display. While we have a full boat of Qualcomm shares, the position in Universal Display is one we want to build, especially after the more than 18% pullback.
I’m also reading that Apple’s long-expected upgrade to organic light-emitting diode displays for select iPad models could start to hit shelves in the coming quarter. I suspect that display technology will be part of the iPad Pro line given its premium nature, a move that follows how Apple adopted that display technology across the iPhone.
While iPad volume is much smaller than those for iPhone, the display size is significantly bigger which bodes well for Universal’s organic light emitting diode chemical demand. Let’s also keep in mind the follow-on that tends to happen as Apple’s competitors mimic some of its moves. All of this speaks to better demand for Universal in the coming months and compared to 2H 2023.
Much like our recent additions to Apple (AAPL) and Google (GOOGL) shares, today’s incremental buy on OLED shares could be on the early side but I’m more focused on where the share will be in the coming several quarters, not the next few days. OLED shares are nearing being overbought, and if they trade-off further we will have ample room after today’s trade to pick up more, further improving our cost basis.
As we make today’s trade, we will adjust our panic point for OLED shares to $140 from $145.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long OLED, AAPL, QCOM and MSFT.
