Rising Trend From LG Display Supports This Portfolio Position

In keeping with our strategy to mine earnings reports and conference calls for the customers, competitors and suppliers that touch our holdings, we're reviewing the latest from LG Display LPL.

Because LG Display is a top customer of Universal Display OLED, we are digging into its Q4 2024 results. LG Display’s revenue increased 15% sequentially with its organic light-emitting diode products hitting a record high of 60% across its revenue for the quarter, up from 58% in Q3 2024 and 57% in Q4 2023 due to “sizable” shipment growth for smartphones. By revenue application, LG’s revenue for the quarter was as follows: 22% for TV panels, 28% for IT devices (monitors, laptops, tablet PCs), 42% mobile and 8% auto. Those figures point to favorable Q4 demand for Universal Display as well as confirm the widening end market applications for organic light-emitting diode displays.

In terms of guidance, LG shared it sees its smartphone business growing 20% year over year, which is faster than overall smartphone growth forecasts, suggesting further inroads for organic light-emitting diode displays. While LG isn’t participating in the foldable smartphone market just yet, it did share that it has a “global customer” for a foldable notebook product that is in mass production. LG also sees its automotive organic light-emitting diode business rising more than 70% albeit off much lower levels compared to the smartphone business, but we see that indicating adoption is continuing.

All told, LG’s performance and outlook support our bullish stance on OLED shares. The next set of catalysts we’ll be watching will be Apple’s AAPL quarterly results on January 30 and those from Samsung SSNLF the following day. With OLED shares trading near where we last acquired shares for the Portfolio, we continue to rate the shares a One.

Keeping Watch on Applied Materials

When we dig into Samsung’s results, we’ll also be interested in its capital spending comments for semi-cap equipment given our position in Applied Materials AMAT.

We are seeing AMAT shares continue to chug higher with this latest burst likely fueled by the Stargate AI announcement as folks consider the additional demand resulting in more chip capacity needs.

That has led AMAT shares to bump up against technical resistance at the 200-day moving average at $198.13. If the shares can move past that resistance level, we could see them run further. However, with AMAT shares now in overbought territory, should they not move past the 200-day moving average, we may be inclined to do some prudent trimming following the more than 20% move in share shares since late December. Between rising capital spending levels, prospects for increasing chip industry capacity levels, and the impact of U.S. and European CHIPs Act spending, we are inclined to remain owners of AMAT shares.

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