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Universal Display Stock: Similar to Late-’90s Qualcomm

Stock MarketsSep 21, 2021 03:31PM ET
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© Reuters. Universal Display Stock: Similar to Late-’90s Qualcomm

Technology investors paying too much attention to Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL) (GOOG), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA) have perhaps missed the shares of a small technology company ready to explode.

Universal Display (NASDAQ:OLED) looks reminiscent of Qualcomm (NASDAQ:QCOM) back in the late 1990s. That's when Qualcomm's shares soared from less than $5 in 1998, to $87 by 1999.

Last week, Universal Display received certification for a new product that increases safety, reduces workplace risks, and enhances health and well-being at work.

“We are highly pleased to achieve ISO 45001:2018 certification, our third ISO certification, which demonstrates UDC’s company-wide engagement and commitment to maintaining a safe and healthy environment and community,” said Steven V. Abramson, president and CEO of Universal Display.

What OLED Has in Common with QCOM

Universal Display and Qualcomm are in different segments of the technology industry.

Universal Display develops and manufactures organic light-emitting diode technologies and materials. It also provides services to the display and lighting industries. Qualcomm develops and commercializes technologies and products for mobile devices and other wireless products, like network equipment, broadband gateway equipment, consumer electronic devices, and other connected devices worldwide.

The two companies do have something in common. They both own dozens of patents, which provide them a steady flow of royalties from fast-growing industries that use these patents.

Wall Street's Take

Wall Street began taking notice of Qualcomm back in the late 1990s when its products became the standard components in cellular phones, and later on in smartphones.

After an initial spike in 1999, Qualcomm's shares have been among the top technology winners on Wall Street next to Apple, Google, and Amazon.

Over the last five years, Wall Street has begun to notice Universal Display, too, with its shares rising 228.1%, compared to a 148.6% gain in Qualcomm's shares.

That may be just the beginning, as Universal Display is in the right place at the right time, with its OLED technology is about to replace Liquid Crystal Display Technology or LCD in flat panel screens.

OLED has a narrow analyst following, with a Moderate Buy consensus rating based on three Buys, and one Sell. The average OLED price target of $238.25 represents 24.1% upside potential.

A Bright Future

Universal Display has also entered agreements with several Asian panel manufacturers, including Sony Corporation (NYSE:SONY), LG Electronics, and AU Optronics (AUOTY).

OLED has several advantages over LCDs: energy efficiency, thinner profiles and lighter weight, higher contrast ratios, wider viewing angles, faster video streaming, and lower manufacturing costs.

Meanwhile, Qualcomm has suffered several setbacks with regulators in China and its U.S. partners. That's questioning its ability to continue its exponential growth in the long-term.

Bottom Line

Qualcomm and Universal Display are two broadly followed stocks, meaning Wall Street has factored in all public information about the two companies.

Over the long-term, however, Universal Display is a better bet than Qualcomm, as OLED appears to be an emerging market with plenty of growth ahead

Disclosure: At the time of publication, Panos Mourdoukousas owned shares of OLED, GOOG, AAPL, QCOM, and MSFT.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Universal Display Stock: Similar to Late-’90s Qualcomm

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