OmniVision Technologies, Inc. (OVTI), Apple Inc. (AAPL), Tesla Motors Inc (TSLA): A Few Reasons Why This Explosive Stock Is Worth Buying

When the Street unfairly punished OmniVision Technologies, Inc. (NASDAQ:OVTI) a quarter ago for failing to provide a snazzy outlook, it was clear that this overreaction would open up opportunities for astute investors. Well, those investors certainly celebrated this weekend with a bottle of champagne as OmniVision shares overreacted on the positive side after it released its fourth-quarter results.

OmniVision Technologies, Inc. (NASDAQ: OVTI)

The stock soared close to 20% as OmniVision Technologies, Inc. (NASDAQ:OVTI) delivered a heavy beat and guided well above Street estimates, which isn’t surprising as the company’s business has been showing signs of promise from last year. There are a ton of catalysts that can drive OmniVision Technologies, Inc. (NASDAQ:OVTI) even higher going forward.

Let’s begin with A for Apple Inc. (NASDAQ:AAPL)

While seasonality was the primary reason behind OmniVision Technologies, Inc. (NASDAQ:OVTI)’s shallow guidance last time, this shouldn’t be a factor going forward as we move into the second half of the year. Its major customer, Apple Inc. (NASDAQ:AAPL), is readying its next-gen products. It is rumored that Apple Inc. (NASDAQ:AAPL) supplier Sharp would start ramping up production of displays for the next iPhone this month.

Throw in the upcoming iPads, more importantly the iPad mini, which is expected to have a retina display this time, and things start looking even better for OmniVision Technologies, Inc. (NASDAQ:OVTI). It is rumored that Apple would launch the refreshed version of the iPad mini in the fall/autumn period and production is expected to start in summer. It shouldn’t be forgotten that the iPad mini sold at a supersonic clip last holiday season and a retina-sporting model will probably generate more revenue for Apple Inc. (NASDAQ:AAPL), and OmniVision, in turn.

But, why is Apple Inc. (NASDAQ:AAPL) so important for OmniVision Technologies, Inc. (NASDAQ:OVTI)? Well, it had supplied camera sensors for the iPad mini, the fourth-gen iPad, the latest iPod, and the secondary camera sensor for the iPhone 5. Moreover, Apple Inc. (NASDAQ:AAPL) is rumored to launch a budget iPhone for the emerging markets, which it might start producing next month. If such a product is indeed launched, then OmniVision will see its addressable market increase by one more product and a few million more customers (probably).

Conquering the Middle Kingdom

OmniVision expects to benefit from the burgeoning Chinese smartphone market and has landed a few design wins at some of the major tier 1 handset makers in the country. Better sales to Chinese customers helped OmniVision exceed its guidance in the previous quarter, and as smartphone makers from the region are going international, OmniVision should enjoy further growth going forward.