Key Highlights
Sandisk has been added to the S&P 500 index.
The company’s market valuation currently exceeds $31 billion.
Sandisk regained its independent status after separating from Western Digital this year.
Enterprise flash storage products now make up the majority of its revenue.
New York — Sandisk Corp. joined the S&P 500 index on Friday after its valuation exceeded $31 billion and met the committee’s eligibility requirements.
Shares rose in early trading on Friday before giving back some gains later in the session. Even after the pullback, Sandisk remains one of the most traded semiconductor-related stocks this year. Its market capitalization now exceeds $31 billion, according to estimates compiled by Visible Alpha.
The company regained its independence in February through a spinoff designed to focus operations on flash-based storage for enterprise customers. Western Digital retained its magnetic disk business, while Sandisk assumed responsibility for NAND products and high-performance solid-state drives used by cloud computing providers.
Major data center operators have increased orders for storage hardware as they deploy servers that handle large-scale model training and recovery tasks. This has supported higher prices for flash components following a difficult period of oversupply in the memory industry.
Index movement and eligibility
Sandisk joined the S&P 500 after completing Omnicom Group’s acquisition of Interpublic Group earlier this week. The index committee considers factors including:
Entry typically results in additional buying activity because index-tracking funds are required to hold the company’s shares.
Related index changes
Several adjustments accompany the inclusion of Sandisk:
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PTC Therapeutics will move to the S&P SmallCap 600, taking Sandisk’s former spot.
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Work up It will also join the SmallCap 600, replacing Premier, which has become privately owned.
These updates will be reflected in index tracking portfolios early next week.
Business segments and customer base
Sandisk’s revenue is generated primarily from enterprise storage products supplied to server and cloud manufacturers. These products include NAND components and solid-state drives installed in high-capacity data center equipment.
The company reports a smaller contribution from retail and consumer storage devices than in previous years. Corporate accounts now account for the majority of shipped volume, according to internal segment disclosures.
Sandisk has signed supply agreements with large technology companies that operate data centers used for model processing, digital media services and commercial cloud platforms. Prices for flash products saw an improvement this year compared to the period before Western Digital’s spinoff.
Sandisk joins the S&P 500 in its first year as an independent company, meeting the size and business criteria necessary for inclusion in the benchmark index.
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