Sandisk Added to S&P 500 After Valuation Reaches $31 Billion
Sandisk enters the S&P 500 following a substantial valuation increase following strong orders for enterprise flash storage used in large data-center systems.
Key Highlights
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 jumped in early trading Friday before returning some gains later in the session. Even after the pullback, Sandisk remains one of the most heavily traded semiconductor-related stocks this year. Its market capitalization now stands above $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 clients. 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 retrieval tasks. This has supported higher pricing for flash components following a difficult period of oversupply in the memory industry.
Index Movement and Eligibility
Sandisk joined the S&P 500 after the completion of Omnicom Group’s acquisition of Interpublic Group earlier this week. The index committee considers factors including:
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Market value
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Liquidity
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Financial reporting standards
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U.S. listing requirements
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 Sandisk’s inclusion:
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PTC Therapeutics will move into the S&P SmallCap 600, taking Sandisk’s former place.
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Upwork will join the SmallCap 600 as well, replacing Premier, which has transitioned to private ownership.
These updates will be reflected in index-tracking portfolios at the start of next week.
Business Segments and Customer Base
Sandisk’s revenue is mainly generated from enterprise storage products supplied to cloud and server 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 represent the majority of shipped volume, based on internal segment disclosures.
Sandisk has signed supply agreements with large technology firms that operate data centers used for model processing, digital media services, and commercial cloud platforms. Pricing for flash products recorded an improvement this year compared with the period before the separation from Western Digital.
Sandisk joins the S&P 500 within its first year as a standalone business, meeting the size and trading criteria required for inclusion in the benchmark index.
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