Stocks That Could Be the Next Apple: Apple is the most valuable brand in the world, generating $260.2 billion in brand revenue in 2019 according to Forbes. It’s also has one of the biggest market capitalizations in the world, falling just short of $2 billion in 2020.
This cool technology brand changed the world for a generation, releasing iconic products like the Macintosh computer, iTunes, iPod, and iPhone. Each was followed by a slew of knockoffs, and Silicon Valley executives still bite co-founder Steve Jobs’ turtleneck style.
You won’t find a more ravenous customer base than those of Apple, and collectively they drove AAPL stock price through the roof.
CEO Tim Cook continues pushing Apple’s closed ecosystem, and the iconic brand holds plenty of value for potential investors. Others are more interested in finding stocks that could be the next Apple, and that’s what we’ll be doing today.
Here are the four stocks to invest in if you want a crack at the next $2 trillion company.
Like Apple, Tesla Has A Cult Following
One of Apple’s next-generation projects is developing an autonomous driving system and electric vehicle. If that sounds familiar, it’s because Tesla (NASDAQ:TSLA) is driving in that same lane. And the electric car company’s fans are just as rabid as Apple’s.
In fact, Tesla founder, CEO, and 20-percent owner Elon Musk follows a lot of Steve Jobs’ ideals regarding aesthetics, a closed ecosystem, and other signature Apple business moves.
He regularly throws press conferences to launch his latest projects, with November 2019’s Cybertruck launch being notable for the vehicle’s unique design and Musk learning bulletproof windows aren’t indestructible.
Not only does Tesla make electric vehicles, but it also controls a network of SuperCharger EV charging stations, Powerwall home power storage, and solar roof panels.
If that’s not enough, its sister company The Boring Company is actively pursuing the rights to build an underground tunnel system connecting Las Vegas and Los Angeles giving an exhaust free express lane for Tesla owners to travel between the two cities.
Tesla’s September 22 “Battery Day” is the place Musk plans to discuss how the company will continue beating the odds post-coronavirus.
It’s the battery life that ultimately determines how useful an electric vehicle is, and the company’s Gigafactory works on producing cheaper and more efficient batteries to increase driving ranges. This energy storage is the long-term revenue play, but that doesn’t mean the car sales won’t continue growing too.
Although Tesla failed to get inducted into the S&P 500 immediately upon qualifying, it can still become a valuable part of other indices.
EV rival Nikola is under heavy scrutiny for deceiving investors about its technology, and Tesla got back up and running faster than other American auto manufacturers following the coronavirus pandemic. This gives Tesla and its fervent fanbase something to get excited about heading into 2021.
Facebook Oculus Is A Bet On Virtual Reality
Before Facebook (NASDAQ:FB), social media sites, forums, and chat rooms were temporary and pseudonymous. It created a normalized platform for people to voluntarily share what they love, hate, and everything in between. Not only is it four (FB, Messenger, Instagram, WhatsApp) of the most popular mobile apps, but it’s also a consumer electronics brand.
The Portal is more popular than ever now that video calls are commonplace. Facebook also owns Oculus, which extends its reach and ecosystem into the $18.8 billion virtual reality market.
Much like Apple, the Oculus Store is an enclosed ecosystem that’s fully under the company’s control. This provides a level of quality in development and provides occasional exclusive titles.
Not only does Rift VR work on desktops, but the standalone Oculus Quest is an all-in-one wireless VR experience that doesn’t require a PC or dedicated video game console like the HTC Vive, Windows MR, and PSVR do.
VR got a boost from the COVID-19 shutdowns. Everything from healthcare to music festivals and concerts went virtual, and VR was an immersive way to escape municipal lockdowns. With the CDC expecting the 2020-21 flu season to be a rough one, hunkering down with a digital escape is becoming more commonplace.
The Oculus Quest is sold out heading into the 2020 holiday season, and that means Facebook has a large audience and a viable VR platform that can compete with the experiences offered by Microsoft and Sony’s next-generation consoles.
And it has seemingly unlimited resources to do it – Facebook stock has nearly tripled since 2015, and it earned over $70 billion in revenue in 2019 alone. That’s still shy of Apple’s $260 billion that same year, but even Apple needs Facebook and Oculus to survive.
(Alphabet) Google Smart Home Is A $50Bn Market
HomeKit is Apple’s self-contained smart-home ecosystem that lets you use your Mac and iPhone/iPad devices to control your lights, TV, and other smart appliances.
This brings Apple’s aesthetic into the home, and it’s not alone in that pursuit. Alphabet Inc (NASDAQ:GOOGL) made moves throughout the 2010s to become a venerable opponent to Apple in the $50 billion smart home market.
Google bought Nest for $3.2 billion in 2014. This smart thermostat company proved itself on its own, and Google integrated it into its Google Home ecosystem, which also includes smart security cameras and lights that create an advanced home security system.
Like Apple, everything can be controlled via a smartphone, only this time it’s Android with its Google Play Store running the show. You can also use any Chromecast devices, Chromebooks, and Google Assistant. This makes Alphabet a good bet to becoming the next Apple.
Samsung Tops Global Unit Volume For Mobile Phones
Samsung (KRX:005930) has long competed with Apple for smartphone market dominance. While Apple dominates market share by revenue, Samsung dominates the market by volume. It’s also more popular than Apple outside the U.S.
Apple even sued Samsung in 2011 for infringing on its iPhone patents, trademarks, and other intellectual property (IP) and won a $1.049 billion judgement.
This was later reduced to $539 million in 2018, and that’s only one example of the similarities between Samsung and Apple.
Despite their competition, Apple long used Samsung’s OLED displays, NAND flash, and DRAM chips in the iPhone.
The company is the largest consumer electronics manufacturer by revenue in the world. In 2019, the company sold 296 million of the 1.5 billion mobile phones bought worldwide and is well-positioned to grow with the move to 5G. It has lucrative 5G deals in place with partners like Verizon and Japan’s KDDI 9433.T that could outpace earnings expectations. And COVID-19 didn’t slow the company down much, as it’s expected to finish the 3rd quarter of 2020 with 79 million smartphones sold.
And it’s not just smartphones – it also owns JBL, Harman/Kardon, Infinity, Joyent, AdGear, SmartThings, LoopPay, Prismview, Nexus, and more. Samsung competes with Apple and Google with its own app store, mobile wallet, accessory deals (like Gear VR), and more. It has smartwatches, tablets, smart TVs, medical devices, appliances, smart home gear, and more. Samsung has its hands in everything, and it’s a respected brand in all of them.
Some analysts even expect Samsung will see huge gains next year based on smartphone and TV sales alone, despite the company’s memory chip business being in a slump ending the year. Of course, this isn’t expected to last long, and the company has the resources to rebound quickly, thanks in part to the geopolitical heat facing Chinese rival Huawei. However, it’s important to know that Huawei’s Harmony OS makes it more akin to Apple’s iOS and MacOS.
Samsung is still competing on Google’s Android platform, but it also makes many of the components used in Huawei devices too. No matter which electronics brand you prefer, there’s a good chance Samsung has a part in it, and that diversified revenue system is ultimately what could grow this well-known brand into the next Apple.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.