3 Tech Stocks to Buy Ahead of Apple Inc.'s iWatch Launch

Apple may unveil the iWatch soon. These three stocks should benefit.

Jun 1, 2014 at 6:00AM

This article was updated on April 1, 2015.

Check out Steve's Aug. 8, 2015, article updating his look at these three stocks: "3 Tech Stocks to Buy Now That We're After the Apple Watch Launch"

With shipments of Apple's (NASDAQ:AAPL) long-awaited Apple Watch set to begin on April 24, 2015,  excitement surrounding the new device has reached a fever pitch.

It's unclear exactly how many units Apple might sell, but early reports say the tech giant wants to ship as many as 3 million Apple Watches per month to start. With models ranging in price from $349 up to $17,000 -- and no, that's not a typo -- Apple Watch represents a huge opportunity for the company to not only gain incremental revenue, but also make its existing ecosystem of products that much stickier for consumers.

Buying shares of Apple isn't the only way investors can play the device. Here are three companies making products that are likely crucial to the iWatch's unique functionality.

On Apple Watch's curved, flexible display
First up is OLED technologist Universal Display (NASDAQ:OLED)

Early last year, LG Display was rumored to have signed an exclusive agreement with Apple to provide millions of small, flexible OLED displays for the Apple Watch. It's unsurprising that agreement hasn't been officially confirmed yet given Apple's secrecy. But assuming Apple Watch's display is indeed OLED, none of this would be possible without Universal Display, which licenses its OLED patents and sells OLED material to LG Display.

There is one caveat: The small screen size involved in producing Apple Watch displays won't do much to boost Universal Display's material sales volumes. But as I wrote when the initial deal with LG Display was reported, "Merely having Apple acknowledge [...] Universal Display's flagship technology should go a long way toward convincing skeptics of its long-term viability."

Sure enough, more recent rumors suggest Apple has tasked suppliers Innolux and Foxconn with building a massive new factory dedicated to producing flexible OLED displays for both wearable devices and a larger smartphone -- the latter of which indicates OLED could be coming to future iPhone models. If that sounds ambitious, keep in mindSamsung has also confirmed plans to offer devices with foldable OLED displays by the end of 2015. Both cases portend great things for Universal Display shareholders.

On Apple Watch's motion sensors
Next, what's an Apple Watch without cutting-edge motion sensors? And that's where motion chip specialist InvenSense (NYSE:INVN) comes into play.

Luckily for investors, shares of InvenSense are still reeling after a series of disappointing earnings reports in part thank to heavy investments in research and development. But according to InvenSense CEO Behrooz Abdi, that R&D opened up "exciting business opportunities in emerging applications, such as wearables" [emphasis mine].

As development costs stabilize in the coming quarters, I think InvenSense shareholders will be more than happy they held on.

On the Apple Watch's protective cover
Finally, consider high-tech glass specialist  Corning (NYSE:GLW) as a play on Apple Watch's durable glass display cover.

And yes, I'm aware two of the three Apple Watch Models -- the standard "Watch" and "Watch Edition" versions -- will boast highly scratch-resistant sapphire crystal covers when they begin shipping. And Corning doesn't currently produce sapphire, which it argues doesn't fare as well as its own Gorilla Glass when dropped. Keep in mind, however, Apple was forced to find alternate sources for sapphire after the shocking bankruptcy of sapphire supplier GT Advanced Technologies last October. 

What's more, given the fact Gorilla Glass has long served as the protective cover of choice for Apple's iPhones, it's highly likely Corning is the company behind the "strengthened Ion-X glass" featured on the Apple Watch "Sport" model. That also happens to be the leastexpensive of the three models, so is most likely to sell in higher volumes.

If that's not enough, Corning management recently told investors they will soon commercialize a new product with the same damage resistance as Gorilla Glass, but with scratch resistance "approaching sapphire." As a result, I won't be the least bit surprised if Corning eventually wins a spot in all three Apple Watch models while continuing to protect Apple's massively popular iPhones. If that happens, patient Corning investors will be the ones who reap the rewards.

The next billion-dollar Apple secret
Apple forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering Apple's brand-new gadgets and the coming revolution in technology. And its stock price has nearly unlimited room to run for early-in-the-know investors! To be one of them, just click here.

Steve Symington owns shares of Apple, InvenSense, and Universal Display. The Motley Fool recommends Apple, Corning, InvenSense, and Universal Display. The Motley Fool owns shares of Apple, InvenSense, and Universal Display. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers