Last Thursday, SanDisk Corporation (NASDAQ: SNDK), a global leader in flash storage solutions, hit a historically high share price of $90.46 per share. The company’s stock is up 25.94% year-to-date and 55.23% over the last 12 months. In addition, SanDisk recently beat analyst earnings expectations for the fourth consecutive quarter, announcing an actual EPS of $1.31 compared to the consensus EPS forecast of $1.17. A slew of upgrades from analyst firms followed SanDisk’s quarterly financial report, indicating widespread optimism of continued success. SanDisk’s Board of Directors also shares this confidence, as demonstrated by their plan to raise the company’s quarterly cash dividend by 33% to $0.30 per share (learn more about dividends here). A member of the S&P 500 and a Fortune 500 company, SanDisk appears poised to build upon its recent success through two major opportunities: the growing market for solid-state drives, and its profitable partnership with tech juggernaut Apple (NASDAQ: AAPL).
Solid state drive technology (SSD) represents one of the most significant advancements in computer component technology. According to Lifehacker, “adding a solid-state drive to your computer is simply the best upgrade at your disposal, capable of speeding up your computer in ways you hadn't thought possible.” A solid state drive completes the same function as a hard disk drive (HDD), however the manner in which it does so is vastly more efficient and reliable. Alas, the price of storing data on a SSD is about 7 to 8 times more expensive than using a HDD. Fortunately for SanDisk, one of the largest producers of SSDs, the market for the new technology is quickly expanding. During SanDisk’s analyst meeting, executives indicated that they expect the market for SSDs to grow from $3 billion in 2013 to $7 billion in 2017. This is especially promising for SanDisk, which attributes 25% of its current revenue to SSDs and expects this percentage to increase to 40% by 2017. Given current consumer trends, people rarely hesitate to spend more on new and improved technology (i.e. Apple, Samsung, Motorola). For current and prospective SanDisk investors, the sizzling market for solid state drives represents a promising and profitable reflection of this trend.
In addition to revenues generated from the expanding SSD market, SanDisk’s partnership with Apple will also contribute to the company’s continued financial growth. SanDisk, a leading producer of flash storage solutions for smartphones, cameras, and other portable electronics, is a main supplier of memory technologies used in current iPhone models. The iPhone 5 marked the introduction of SanDisk’s partnership with Apple and so long as Apple continues to update and release new iPhones, investors can also assume that SanDisk will continue to profit from its lucrative relationship. Furthermore, there is also the possibility of Apple expanding its relationship with SanDisk so as to incorporate new memory units into the rest of Apple’s product portfolio. In any case, working alongside the most valuable company in the world bodes well for the future of SanDisk.