Sandisk Can Keep On Rising Even If NAND Prices Cool (Archive, Full Access)
Sandisk rides AI-driven NAND demand, buybacks, and lean capex to sustain upside.
This 5-Minute Pitch was originally published on Seeking Alpha. It is shared here to showcase my work and track record. I also publish full 5-Minute Pitches on this site. This will be behind a paywall, accessible to Hunter Tier members.
Elevator Pitch
- Sandisk's data center storage revenue is surging on AI-fueled demand, with repeated upside surprises versus Wall Street expectations.
- Sandisk is extending its JV with Kioxia Holdings, securing DRAM supply, and boosting fab output through R&D efficiency, keeping capex intensity low while expanding free cash flow margins.
- A newly authorized 6 billion dollar share buyback, alongside rising buyback spending, signals management’s confidence in Sandisk's prospects ahead.
- NAND spot prices have paused rising, and Chinese competitors are expanding capacity, presenting a risk of the memory upcycle ending sooner. But Sandisk can thrive on volume growth alone.
- SNDK's EV/EBITDA premium to peers is now below its historical median levels, while earnings growth is driving most of the stock’s gains—a good foundation for long-term upside.
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