iPhone Shipment Surge Gives Us Reason to Consider Adding to This Related Name
This supports positions in the Portfolio and may lead us to pick up more shares of another tech holding.
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We’re following up on our comments from earlier on Monday about the smartphone market because research firm IDC has also published its Q4 2024 and 2024 smartphone shipment findings.
The results support our earlier comment that Apple AAPL was a market share gainer during the December quarter, with IDC finding its shipments rose almost 35% to 76.9 million units compared to 57.0 million in the September quarter. That’s a strong showing, but as we’ve discussed the more meaningful data will be indications that the upgrade cycle is being fostered by Apple Intelligence. For that, we’ll likely have to wait for the March 2025 shipment data.
If we remember back to when Universal Display OLED reported its September quarter results, we shared that its outlook for the December quarter looked rather conservative. At the time, citing revised customer orders, Universal trimmed its 2024 revenue forecast to $625 million to $645 million from $645 million to $675 million. As we pointed out based on reported revenue for the first nine months of 2024, this put December quarter revenue between $139 million to 159 million compared to $162 million for the September quarter.
Now we’ve received multiple indications the smartphone market rose rather nicely on a sequential basis in the December quarter, especially for iPhone. Except for Apple’s entry-level iPhone SE, which is a lower-volume product, the rest of its iPhone lineup utilizes organic light-emitting diode displays. At the same time, other smartphone vendors have embraced the display technology as have other applications.
To us, this is another signal that Universal’s December quarter revenue guidance is likely to be conservative. While the shares are not oversold at current levels, roughly 1.6 million shares are short exiting 2024, about 2.5 days to cover per data from Nasdaq. We’ll watch these levels as we approach quarterly results from Taiwan Semi TSM, Apple and other key smartphone players, but as it currently stands, it would not take much to trigger a short-covering event.
With this data in hand, based on what we see in the upcoming inflation data, we may elect to nibble on some additional OLED shares for the Portfolio.
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At the time of publication, TheStreet Pro Portfolio was long AAPL and OLED.
