Semiconductor stocks like Intel (INTC) and AMD (AMD) used to be considered a forward-indicator for the economy. If these companies did well, it meant that the economy was healthy and that more growth should be anticipated. Now, these above-mentioned companies should not be considered broad indicators. They are both highly reliant on the health of desktop and laptop sales. The rapid growth of tablet devices suggests Kapitall investors should look at another group of semiconductors: those involved in NAND storage.
According to Webopedia: NAD Storage is one of two flash technologies (the other being NOR) used in memory cards such as the CompactFlash cards. It is also used in USB Flash drives, MP3 players, and provides the image storage for digital cameras.
OCZ Technology (OCZ) warned on September 5 after the close that it was facing a shortage in NAND flash memory. OCZ shares dropped 18.9% on the day. Problems with OCZ are apparently isolated to the company, and not the sector. It also suggests that demand for flash memory is actually stronger than first thought.
NAND flash is used by device makers like Apple (APPL) and Samsung. Both companies are known to be accumulating large quantities of NAND. Along with a supply cut from Toshiba, the limited supply is not surprising.
What are companies investors should add to their Kapitall Watch List in reaction to this news?
1. SanDisk Corp. (SNDK, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. Market cap at $10.69B, most recent closing price at $44.51. The company is an NAND flash memory supplier.
2. Micron Technology Inc. (MU, Earnings, Analysts, Financials): Engages in the manufacture and marketing of semiconductor devices worldwide. Market cap at $6.53B, most recent closing price at $6.39. The company is an NAND flash memory supplier that acquired Elpida in July 2012 to boost its competitiveness
3. OCZ Technology Group, Inc. (OCZ, Earnings, Analysts, Financials): Designs, develops, manufactures, and distributes computer components for computing devices and systems worldwide. Market cap at $310.51M, most recent closing price at $4.57. OCZ warned its Q2 results will be weaker. The company now expects its quarter ended Aug. 31 revenue will be $110M-$120M. This is below its previous guidance of between $130M-$140M and a consensus of $134.4M.
4. STEC, Inc. (STEC, Earnings, Analysts, Financials): Designs, manufactures, and markets enterprise-class flash solid-state drives (SSDs) for use in high-performance storage and server systems. Market cap at $362.94M, most recent closing price at $7.74.
In the hard disk space:
5. Seagate Technology PLC (STX, Earnings, Analysts, Financials): Designs, manufactures, markets, and sells hard disk drives for the enterprise, client compute, and client non-compute market applications in the United States and internationally. Market cap at $12.16B, most recent closing price at $30.37.
6. Western Digital Corp. (WDC, Earnings, Analysts, Financials): Engages in the design, development, manufacture, and sale of hard drives worldwide. Market cap at $10.35B, most recent closing price at $41.99.
Semiconductor stocks often moving on NAND pricing are:
7. NVIDIA Corporation (NVDA, Earnings, Analysts, Financials): Provides visual computing, high performance computing, and mobile computing solutions that generate interactive graphics on various devices ranging from tablets and smart phones to notebooks and workstations. Market cap at $8.3B, most recent closing price at $13.38.
8. Intel Corporation (INTC, Earnings, Analysts, Financials): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap at $121.02B, most recent closing price at $23.68.
9. Advanced Micro Devices, Inc. (AMD, Earnings, Analysts, Financials): Operates as a semiconductor company in the United States, Japan, China, and Europe. Market cap at $2.44B, most recent closing price at $3.56.
Written by Chris Lau. To get a snapshot for each company, click on the company icon. To get more detailed fundamental information on any of the companies, open the snapshot and select “number cruncher.”
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- SanDisk Corp. (SNDK, Chart, Download SEC Filings)
- Micron Technology Inc. (MU, Chart, Download SEC Filings)
- OCZ Technology Group, Inc. (OCZ, Chart, Download SEC Filings)
- STEC, Inc. (STEC, Chart, Download SEC Filings)
- Seagate Technology PLC (STX, Chart, Download SEC Filings)
- Western Digital Corp. (WDC, Chart, Download SEC Filings)
- NVIDIA Corporation (NVDA, Chart, Download SEC Filings)
- Intel Corporation (INTC, Chart, Download SEC Filings)
- Advanced Micro Devices, Inc. (AMD, Chart, Download SEC Filings)
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