Micron presently holds a 15% market share in the NAND flash market. According to the projections offered by Trefis, its market share will gradually surpass 16% during the next six years. However, if it manages to blow past the 18% mark, then there may be a strong upside to its present stock price.
The NAND flash storage division holds a 52% value it its present stock price; hence, investors can expect Micron Technology, Inc. (NASDAQ:MU)’s stock to grow parallel with the overall market. Any fall or increase in demand will have a direct impact on Micron’s stock price.
Seagate Technology PLC (NASDAQ:STX) also competes with SanDisk. It manufactures HDDs (Hard Disk Drives) however; it has now switched its focus on manufacturing SSDs (Solid State Drives) and hybrid disks. The company firmly believes in the radical nature of SDDs and considers it as the future of storage devices.
Seagate Technology PLC (NASDAQ:STX) has well diversified revenue streams. It designs client compute applications for netbooks and notebook storage applications. the company generates a staggering 56% of its overall revenues through this division. This is followed by Enterprise & Cloud storage and TV/DVR consoles, at around 25% and 19% respectively.
According to valuation offered by Trefis, the client compute applications division is 52% of its present stock price, which is indicative of its importance. Future growth in its stock price will heavily rely on how industry trends favor the company.
Favorable trends
During the last quarter, SanDisk exhibited promising signs, as it reported growth in several facets of the business. The industry trends further add optimism, with improvements in average selling prices and rapidly escalating demand for smartphones.
Going forward, I believe the growing preference for cloud storage — which appears to have stagnated SanDisk’s growth — will not have a lasting impact. In the long run, cloud storage technology will be propped up through radically advanced technologies, which are superior to traditional hard disk drives.
This presents as an opportunity for SanDisk to bolster and sustain its future growth. Need for such advancements will not allow the cloud storage technology to have a lasting impact on SanDisk’s growth. Investors with a long term horizon should hold onto SanDisk stock, as the company’s long-term fundamentals and industry trends are promising.
Kiran Gulati has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article Will New Cloud Storage Technology Impact SanDisk’s Stock Price? originally appeared on Fool.com and is written by Kiran Gulati.
Kiran is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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