Investing.com -- Barclays initiated coverage of SanDisk Corp (NASDAQ:SNDKV) with an Equal Weight rating and a $50 price target as it noted near-term improvements in NAND industry dynamics while also factoring long-term structural challenges in supply and demand.
“Near-term NAND industry dynamics seem more favorable, but we still think the industry needs further consolidation and supply/demand is challenged structurally longer term,” analyst at Barclays said.
SanDisk, following its separation from Western Digital (NASDAQ:WDC), holds an 11% share of industry shipments and faces a highly competitive market that may require further consolidation.
While industry players are proactively cutting utilization to counter oversupply, Barclays remains cautious about the sustainability of demand recovery in the second half of the year.
The firm highlighted skepticism over expectations for an AI-driven PC upgrade cycle, a strong enterprise PC refresh, and a robust smartphone rebound.
Despite potential near-term stability in average selling prices, Barclays views the NAND industry as structurally oversupplied and remains on the sidelines regarding SanDisk’s long-term growth prospects.
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