We're Buying More Shares of This Technology Position
We will take advantage of the stock's oversold status as end-market diversification unfolds.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
OLED | Buy | 125 | 165 | 1,115 | 3.7 |
After you receive this Alert, we will buy 125 shares of Universal Display OLED at or near $165. Following the trade, OLED shares will account for roughly 3.7% of the portfolio.
We are taking advantage of the oversold condition in shares of Universal Display following their pronounced post-earnings drop over the last few weeks. That fall was spurred by the company’s December-quarter guidance, which increasingly looks to be overly conservative given subsequent smartphone data points.
These smartphone data points include reports that Samsung Display’s capacity is booked and cannot supply enough organic light-emitting diode displays for Samsung smartphones, prompting the company to use outside suppliers. Helping to explain that production tightness, Huawei is expected to order 61 million organic light-emitting diode panels this year, up 81% compared to last year. With an estimated smartphone market share of 56% in Q3 2024 by research firm Omdia, there is more road to go even before we contemplate larger display sizes and the impact of foldables.
At the same time, we’re also seeing further inroads by the display technology into other markets, which, over time, should lessen Universal Display's reliance on the smartphone market. This week LG introduced a new UltraGear organic light-emitting diode gaming monitor while Asus is offering a Copilot+ Laptop with an organic light-emitting diode display for $550.
Meanwhile, automotive display company Himax Technologies HIMX announced the mass production of its latest organic light-emitting diode display. This along with further adoption in Audi and 2025 models from Audi, Lotus, Lucid, Mini Cooper, and others points to rising adoption in the automotive market. Given the lead time for new models in the automotive market, we’ve seen this adoption coming in taillights and interior displays, and much like the smartphone market, it should trickle down from premium offerings to mass-market ones over time.
Assembling the above points to an expanding market for organic light-emitting diode displays next year and the following ones, which should drive revenue and IP licensing for Universal Display. Despite these maturing end-market opportunities, OLED shares are trading below where they were entering 2024 and are oversold. While some may be focused on the smartphone market in the very near term, we’ll focus on the medium to longer-term opportunities. With that in mind and because of our move today, we will reset our panic point for OLED shares to $140 from $165.
Coming Up: Our Reaction to Qualcomm’s Investor Day
That same end market diversification story was at the heart of Qualcomm’s QCOM Investor Day yesterday, and we’ll be breaking down what was shared as well as our reaction in a forthcoming Alert.
On Our Shopping List Radar
As we scoop up additional OLED stock, we will continue to closely monitor shares of Applied Materials AMAT and Lockheed Martin LMT. Both have come down hard of late, and while neither of the shares are oversold their risk to long-term reward tradeoff skews favorably, especially considering prospects for increasing spending on semi-cap equipment and defense.
We are also evaluating our next move with PepsiCo PEP, which like OLED shares, are deeply oversold at current levels.
(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 click on Closed Trade Gain/Loss and toggle the chart to sort by Purchase Date.).
At the time of publication, TheStreet Pro Portfolio was long OLED, QCOM, AMAT, PEP and LMT.
