4 Technology Companies Piggy-Backing On Apple's Rise

|
Includes: AAPL, ARMH, DVMT, GLW, GOOG
by: Kevin Quon

Apple's (NASDAQ:AAPL) continued rise in share price continues to impress investors and spectators alike as speculation over this $500 billion company gives way to an optimistic expectation of a soon-to-be-made $1 trillion enterprise. With a forward earnings consensus of $47.49/sh, it seems difficult to downplay the possibility of this tech company reaching the needed $1072 share price which would place it at a plausible 22.6 forward price-to-earnings ratio. Though its likely to pull back soon from a technical standpoint, the trend of the company illustrates a momentum of success that is difficult to reverse.

Yet with the ongoing success of the company, it's important to remember that Apple has served both as the driver of the tech boom as well as a beneficiary of it. The success of Apple's products have aligned alongside the accomplishment of correlative industries, which in turn has helped to fuel ongoing innovation. Those looking for additional exposure to technology companies that have piggy-backed on the rise of Apple's markets may wish to consider the following four companies. All values were taken as of March 4, 2012:

Name Market Cap. Forward P/E Rev. Growth Rate Industry
EMC (EMC) $58.68 B 14.5 14% Data Storage Solutions
Corning (NYSE:GLW) $19.72 B 8.6 6.9% Specialty Glass
Google (NASDAQ:GOOG) $201.99 B 12.4 25.4% Internet Information
ARM Holdings (NASDAQ:ARMH) $11.77 B 30.4 20.9% Microprocessors
Click to enlarge

EMC: With the increasing popularity of mobile devices highlighted by the momentum found in 3G/4G phone adoption, the amount of time your average individual spends on the Internet increases exponentially. Pioneered by Apple's iPhone revolution, this trend bodes well for data storage provider EMC. Coupled with the increasing proliferation of broadband Internet access in developing regions around the world, the demand for data storage solutions continues to rapidly grow. With Apple's possible release of a successful Internet TV model and the ensuing knockoff market to follow, significant amounts of storage demand could be on the horizon in light of a world becoming ever more reliant on cloud computing. EMC offers a play on a growing Internet trend that requires expanding data storage solutions.

Corning: Perhaps not perceived as a being a real high-tech play in the investing world of gadgetry, the company's 'old school' technology of specialty glass continues to be a driver of innovation for mobile devices and televisions. Though there is much speculation over whether or not Apple actually uses Corning's "Gorilla Glass," what is certain is that the glass has become the standard for mobile devices across the industry. Corning stands to benefit from increased mobile phone & tablet consumption, an era ushered in by Apple's innovation. Additionally, as organic light-emitting diodes (OLEDs) gain popularity, Corning is sure to be a key player in the next evolution of electronic displays.

Google: It might appear odd to put one of Apple's largest rivals on this short list of companies, but in many respects Apple's success often leads to Google's own. For every iPhone release comes another contender vouching for the title of the iPhone-killer. And with Apple's notorious exclusivity, it makes sense that Google's Android platform continues to be the dominant operating system around. Carrying on with notion of increased internet time, Google's leading position in search and well-established rank in online videos through YouTube allows it to be a natural winner alongside Apple's success.

ARM Holdings: Confirmed as a computer chip developer working with Apple, ARM Holdings supplies many of the microprocessors found in the iPhones and iPads. As a result, the company stands to directly gain the most with increasing sales of Apple's many products. Yet apart from its envied relationship with Apple, the company has been gaining momentum across the board with its chips that tend to use less energy than processors from rival company Intel Corporation (NASDAQ:INTC). With access to markets with a greater number of products, ARM Holdings has gained an advantage over its rival in terms of growth potential. That advantage appears to be growing as the demand for mobile devices strengthens on a revolution set in motion by Apple.

Disclosure: I am long GLW.