Earnings season is in full swing this month with countless stocks on the move. The evolving market has created an exciting time to expand your portfolio by investing in companies with massive potential over the long term.
After an economic downturn in 2022, easing inflation is allowing many consumer-reliant businesses to begin recovering. The improving situation suggests markets like consumer tech and entertainment could be on a growth path, with industry leaders becoming increasingly compelling investments.
Here's why Apple (AAPL 0.38%), Comcast (CMCSA +0.14%), and Warner Bros. Discovery (WBD 0.72%) are no-brainer buys right now.
Apple: The king of consumer tech
Apple launched the first iPhone in January 2007, changing the face of consumer tech and the direction of its business forever. The company's stock has skyrocketed over 5,000% since then, with Apple using its smartphone success to dominate multiple other areas of the tech industry.
The brand loyalty Apple has garnered from the iPhone has allowed it to succeed in nearly every subsequent sector it has entered, including achieving leading market shares in tablets, smartwatches, and headphones. In fact, a 2019 report from Fortune magazine revealed that AirPods alone have become an $8 billion business. If separate from Apple, AirPods would have ranked No. 384 on the Fortune 500 list in 2019, ahead of AMD at the time, only three years after the product first launched.
NASDAQ: AAPL
Key Data Points
Apple's potent brand and quality products have encouraged consumers to keep returning, which is promising for the company's expected launch of a new virtual/augmented reality (VR/AR) headset this year. Apple could soon dominate the burgeoning market with this device, boosting adoption of the technology and significantly profiting from the industry's growth.
As a result, Apple shares are an immensely compelling buy ahead of the company's venture into the VR/AR market.
Comcast: A lucrative pivot to content production
Comcast has had a rocky few years alongside the declining cable industry as linear offerings have fallen out of favor with consumers. However, the company's gradual transition to content production at the box office and in streaming could be a massive green flag for its future.
The company boasts popular movie franchises such as Jurassic Park, Back to the Future, and Fast & Furious. Meanwhile, Comcast's animation studio Illumination produced April's smash hit film The Super Mario Bros. Movie, which has crossed $1.2 billion since releasing on April 5.
Moreover, Comcast's subsidiary NBCUniversal has produced some of the world's most successful sitcoms, including The Office, Parks and Recreation, and Brooklyn 99. These shows are useful tools for attracting subscribers to the company's streaming service, Peacock. In fact, The Office was the most streamed show in 2020 with audiences watching over 57 billion minutes on Netflix. For reference, the second-most-streamed show was Grey's Anatomy, with 39 billion minutes.
NASDAQ: CMCSA
Key Data Points
Netflix lost The Office to Comcast's Peacock in 2022, a move that has undoubtedly helped drive the platform's growth. Peacock subscribers increased by over 60% to 22 million in Q1 2023, with revenue rising 45% to $685 million. With an attractive forward price-to-earnings ratio of 11, the company's stock is a stellar buy right now.
Warner Bros. Discovery: A cheap option with a lot of potential
Warner Bros. Discovery shares are an increasingly tempting investment as short-term headwinds have caused its stock to fall 10% in the last month. Investors have pulled back after the company's Q1 2023 revenue missed Wall Street expectations by $70 million. However, the company continues to have a solid long-term outlook thanks to consistent hits in its content offerings and a profitable streaming business.
Despite a revenue miss, Q1 2023 represented a massive achievement for Warner Bros. Discovery. The streaming business turned a profit for the first time, with its direct-to-consumer segment reporting $50 million in EBITDA and 1.6 million new streaming subscribers. The positive development comes earlier than expected, with CEO David Zaslav previously stating the company's streaming business would break even in 2024 and hit profitability by 2025.
NASDAQ: WBD
Key Data Points
In addition to streaming growth, Warner Bros. Discovery has landed multiple wins with its content this year. Its hit HBO series The Last of Us premiered in January and became the most-watched show in the company's history outside of the U.S. Meanwhile, its Harry Potter-themed video game Hogwarts Legacy earned $1 billion in Q1 2023, more than any other game in the quarter.
With content that is grabbing consumers' attention, Warner Bros. Discovery's recent stock tumble has vastly increased its value, and analysts seem to agree. Their average 12-month target for the stock price is $21, or 75% higher than its current position. The optimism isn't farfetched considering Warner Bros. Discovery's potential, and the stock is worth considering for your next investment.
