Missed Out on Apple? Buy This Essential Supplier Instead
Apple's (NASDAQ: AAPL) stock is up 40.5% since the start of 2023. Investors have bought into the idea that its product sales (principally iPhone) growth would improve after a temporary lull, backed by ongoing strong growth in its higher-margin services revenue. That thesis worked out just fine, and there may be more room to run with Apple stock. But why not start to look at companies that supply Apple with the technology to manufacture its products, like (NASDAQ: CGNX)?
Cognex sells its machine vision solutions to three main markets: Consumer electronics (where Apple was previously named as a significant customer), logistics (e-commerce warehousing), and automotive, alongside many other industries, including healthcare.
There's a reason why Cognex's stock is down 16% since the start of 2023, and it comes down to challenging conditions across all three of its end markets. Cognex's revenue declined by 17% in 2023. "About half of our 2023 revenue decline was driven by two large, long-standing customers who reduced their spending after heavy investment in prior years," Cognex CEO Robert Willett said on the last earnings call.
Source Fool.com