We're Adding to One Position and Raising Our Target on Another
Smartphone industry news has us taking advantage of recent weakness in Universal Display and adjusting our target on Qualcomm.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
* We are buying more Universal Display shares are lifting our Qualcomm price target.
* Smartphone industry volumes climbed 7.8% YoY in Q1 202, per IDC.
* Excess Android inventory levels should be in the rear view.
* While positive, the AI-on-device upgrade cycle for smartphones lies ahead.
| Symbol | Transaction Type | #Shares Traded | Recent Price ($) | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
OLED | Buy | 105 | 161.50 | 825 | 3.2 |
After you receive this Alert, we will buy 105 shares of Universal Display OLED at or near $161.50. Following the trade, OLED shares will account for roughly 3.2% of the portfolio’s assets.
We recently learned the PC market broke its two-year slump, with volumes rising 1.5% year over year, in the 2024 first quarter, according to IDC. Now IDC has shared findings that smartphone industry volumes rose 7.8% year over year, in Q1, to 289.4 million units. Compared to Q4 2023, that’s down around 11%, but better than expected.
Parsing the figures, Samsung and Apple AAPL retained the top two slots, but their volumes were down year over year, slightly for Samsung and 9.6% for Apple. That reflects the pressures we’ve been reading about, largely in China for Apple, but as we saw last week, the market is starting to look forward to Apple unveiling its AI efforts at its upcoming WWDC event in June.
Outside of the top two, smartphone volumes for the rest of the industry rose 17.5%, which is positive for Qualcomm QCOM and Universal Display OLED, two of our positions. That volume also signals past inventory issues inside the Android ecosystem should be largely behind the industry, also good for Qualcomm and Universal Display.
In response to this news, we are adding to our OLED holdings, taking advantage of the ~15% pullback since late February, and boosting our price target for QCOM to $200 from $175.
Taiwan Semiconductor TSM reports its outlook for the smartphone market in the current quarter on Wednesday and it will be something to watch. However, to us, the more important commentary will be about the AI-on-device upgrade cycle, which is likely to benefit premium smartphone models before trickling down to mid- and lower-tier models over time. We see that upgrade cycle benefiting QCOM, OLED and AAPL over the coming several quarters.
(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, QCOM and AAPL.
