Sandisk Corp shares surged approximately 10% in afternoon trading on Thursday, continuing a strong rally fueled by artificial intelligence demand. Management told investors that NAND flash supply is likely to remain tight for an extended period, boosting sentiment across the memory and storage sector.
Stock Performance and Analyst Upgrades
Shares of Sandisk last traded at $1,533.00 as of 2:52 p.m. EDT, after hitting an intraday high of $1,538.39. The stock has been on a tear as Wall Street increasingly views storage companies as direct beneficiaries of AI spending, rather than just cyclical hardware plays.
Citi analyst Asiya Merchant raised her price target on Sandisk to $2,025 from $1,300, maintaining a Buy rating, citing higher demand for Sandisk's enterprise solid-state drives used in AI data centers. According to FactSet, 20 out of 26 analysts covering the stock rate it a Buy.
Management Commentary at J.P. Morgan Conference
Sandisk was in focus after management appeared at J.P. Morgan's technology, media, and communications conference on Wednesday. CEO David Goeckeler told investors that the flash market is likely to remain "undersupplied for a long period of time," according to Barron's. He described the old cyclical patterns in memory as "really corrosive." CFO Luis Visoso added that customers are now asking, "how can you ensure there will be supply?"
J.P. Morgan semiconductor analyst Harlan Sur noted at the conference that storage technology is a "critical part" of AI because inferencing demands more memory and storage, as reported by Seeking Alpha.
Financial Results and Sector Rally
Sandisk's latest quarterly results provided further momentum. The company reported fiscal third-quarter revenue of $5.95 billion, up 97% sequentially, with GAAP net income of $3.62 billion, or $23.03 per diluted share. Sandisk attributed the strong performance to a shift toward higher-value customers and increased demand from data centers.
The rally extended to other memory stocks. Western Digital, which formerly owned Sandisk, rose 4.5%, and Micron Technology gained 2.4%. The broader market indexes were relatively flat, with the Nasdaq Composite edging up 0.07% and the S&P 500 gaining 0.15%, underscoring that Sandisk's move was driven by company-specific and sector news rather than a broad tech rally.
Risks and Outlook
Despite the bullish sentiment, risks remain. Memory markets have historically swung from shortages to gluts when orders stall or suppliers expand capacity. Sandisk's current valuation leaves little room for error if demand weakens. A slowdown in AI data-center spending, an easing of supply constraints, or softer pricing on long-term contracts could trigger a sharp pullback.
For now, scarcity is driving prices higher, and Sandisk shares are signaling that AI has fundamentally altered the traditional storage cycle, at least for the time being.
