Arm Vs Sandisk Stock

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Arm Vs Sandisk Stock

ARM Vs. SanDisk Stock. Which Stock To Buy?

SanDisk and ARM are two big names in the tech sector. A quick look at SanDisk shows its revenue has grown by 3x in the last 2 years. Meanwhile, the growth of ARM is a little more modest.

If you really had to choose between these two, then which stock would you buy? Let's take a closer look at SanDisk and ARM.

ARM

ARM makes its money mostly from royalty collection and licensing of proprietary chip designs. The company basically engineers and licenses its CPU designs and GPUs, system property solutions, and software development tools to equipment makers.

The last quarter's data shows that the operating margin of ARM is near 7.6%, which is quite good. Also, one good thing about ARM is that it gets recurring and predictable revenue.

SanDisk

SanDisk designs, manufactures, and supplies a number of digital storage solutions. The company makes memory cards, SSDs, embedded memory components, and other storage products.

The company has also recently started manufacturing operations for a new generation of flash memory in Japan. The company has also reduced its regional workforce in an attempt to cut costs.

The data shows that the operating margin of SanDisk during the quarter was 78%. If you compare it with ARM, then it is clear that SanDisk is leading in that department.

SanDisk Stock Is The Better Buy

It is clear that the growth trajectory of SanDisk is better than ARM's. A key reason for this is that SanDisk can set high selling prices for the products.

The demand for AI remains high, which naturally means a high demand for high-capacity SSDs. Looking ahead, one key thing to watch is whether the long-term supply agreements will remove the volatility in selling prices. If that happens, SanDisk could continue to enjoy stable revenue in the next few years.

ARM's revenue is also consistent over the years. However, its growth rate and the overall operating margins are nowhere close to SanDisk's.

So, it is clear that SanDisk stock is the clear winner. The AI infrastructure boom and the long-term agreements with customers can easily send SanDisk's stock price to new highs.

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