Which 3D Printing Company to Invest in? How HP's Multi Jet Fusion Technology is Changing the Market

This is an updated version of an article first published on July 20, 2015 on 3D Printing Investing News. 
One of the biggest shifts anticipated to occur in the 3D printing market is the introduction of Hewlett-Packard’s (NYSE:HPQ) Multi Jet Fusion technology.
Since this new technology was announced in October 2014, there has been buzz about the effect that HP’s entry into the 3D printing market will have upon other stocks. This new technology could shift how investors determine which 3D printing company to invest in.

Industry-wide anticipation

All major 3D printing stocks have experienced significant declines in value over the past year and a half, and in recent months the market has reached a particularly dire state. That is making it difficult for investors to decide which 3D printing company to invest in.
Stratasys’ (NASDAQ:SSYS) share price, which peaked at $136.46 at the beginning of 2014, is currently trading around $25. Meanwhile, 3D Systems (NYSE:DDD), whose share price peaked at $96.42, is trading near its 52-week low at about $11. Some analysts, such as Dougherty & Co.’s Andrea James, attribute this recent slowdown to anticipation concerning HP’s entry into the market. James has written that “corporate buying managers are delaying purchases while they anticipate HP’s multi-jet fusion product in 2016.”
This delay may just make sense if it turns out that the Multi Jet Fusion technology lives up to the hype. Jerry Wohlers of Wohlers Associates has said, “[HP] is going to rewrite the rules of 3D printing. I can envision companies purchasing expensive equipment and then putting it in moth balls when the new HP equipment becomes available.”

Niche product to fill niche needs

However, Oppenheimer Managing Director and Senior Partner Holden Lewis adamantly opposes this perspective, and has argued that the new HP technology “can have value in a specific niche, but it’s not going to dominate the industry.”
He told the Investing News Network that there are seven different types of 3D printing technologies, and each of those seven has its own benefits and drawbacks. To suggest that HP’s Multi Jet Fusion technology will sweep in and fulfill all 3D printing needs is naive, in his view. “I would be very, very surprised,” Lewis stated, if HP “walk[ed] in and dominate[d] the industry.”

Which 3D printing company to invest in: the competition question

That said, even if HP’s new 3D printing technology fails to dominate the market, it will still introduce new competition. And, as Lewis is fond of saying, “competition is a question that has no answer.” It is possible that the new HP technology will affect only its niche market, but it is more likely that it will further weaken the state of struggling industry heavyweights like Stratasys and 3D Systems.
Lewis said, “I think that these stocks reflect a fear that the companies that are public today aren’t going to win.” While he concluded by stating that “this overstates the risk,” it remains a central concern for investors. Only time will tell what role the new HP technology will ultimately play in the 3D printing market. For now, it’s the job of investors to take bets on its future.
 

Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.