On the one hand, I agree with you on being mystified by the rise in WDC AH. I don't get it either. I still think Micron is a better buy at these levels, especially given their relative balance sheets (Micron's is far superior with net $4b in cash and more FCF, while WDC still has net debt of about $7b) and earnings power and risk profile (the Toshiba situation is a wild card), but that is another story.
On the other hand, I disagree with you about HD sales disappearing. There is far too much storage being created for SSDs to replace it all. There simply isn't enough NAND capacity either now or in the foreseeable future to do it. It is way too expensive to build that much capacity, especially relative to how much it costs to build more capacity in HDs.
So, my opinion is that both of them (HDs and SSDs) will have increasing demand by a lot, especially when applications like IoT, VR, AR and autonomous vehicles really get going. Each of those apps is in their infancy now, but over the next few years they will growing by quite a bit. And even without them, storage demand is rapidly growing (except of course when there is a slowdown as now or, heaven forbid, an actual recession). |
