Overview Memory shares have become the highest-beta expression of the AI infrastructure trade, and the past week has made that unusually visible. CNBC reported that Sandisk (Nasdaq: SNDK) is up 644% yOverview Memory shares have become the highest-beta expression of the AI infrastructure trade, and the past week has made that unusually visible. CNBC reported that Sandisk (Nasdaq: SNDK) is up 644% y

Why Sandisk and Micron Stocks Are Surging: How AI Storage Demand Is Driving Memory Shares

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Author: James Mitchell

2026/09/23 14:49

Overview

Memory shares have become the highest-beta expression of the AI infrastructure trade, and the past week has made that unusually visible. CNBC reported that Sandisk (Nasdaq: SNDK) is up 644% year to date, with Rosenblatt initiating coverage on September 22 at buy with a $2,400 price target. Micron (Nasdaq: MU) has recovered from its mid-September pullback and now faces its own test, with fiscal fourth quarter results due after the close on September 30.

No single event explains the move. Three layers are stacked on top of each other: structural storage demand from AI servers and inference workloads that has pushed NAND and DRAM contract prices to record levels, earnings that have already converted those prices into cash flow, and a flow-driven layer of index inclusion, higher analyst targets and a risk appetite recovery helped by softer oil prices and lower Treasury yields. The real debate is not whether demand is real. It is whether the rate of price increases is slowing, and how much the market is paying for peak-cycle earnings.

Key Takeaways

Sandisk has been repriced from a cyclical name into an AI storage asset. Fiscal 2026 revenue reached $20.25 billion, up 175% year over year, datacenter revenue rose 437%, and the board authorized an additional $14 billion buyback.

Micron operates at a larger scale. Its most recent completed quarter brought in $41.46 billion of revenue, up roughly 346% year over year, with guidance for the following quarter at $50.0 billion plus or minus $1.0 billion and gross margin near 86%.

Pricing is the central variable. TrendForce surveys show explosive contract price increases in the first and second quarters of 2026, followed by a clear deceleration in the third quarter.

Flows matter as much as fundamentals right now. Sandisk entered the S&P 100 before the open on September 21, and passive rebalancing plus target price upgrades amplified short-term moves.

Risk sits on the supply side and in valuation. Chinese capacity expansion, double ordering, demand destruction at the consumer end and position risk in a high-volatility name can all surface quickly once price momentum fades.

What Is Actually Driving the Move

Index Inclusion and Passive Rebalancing

Under the quarterly changes announced by S&P Dow Jones Indices on September 4, Sandisk joined the S&P 100 alongside Dell Technologies, Palo Alto Networks and Arista Networks before the open on September 21, with Nike, Colgate-Palmolive, Simon Property Group and Honeywell Aerospace removed. Funds tracking the index have to rebalance, and predictable passive demand of that kind is routinely front-run by active money. Sandisk's roughly 11% single-session gain on September 18 is a textbook example.

Index membership changes nothing fundamental. The Motley Fool noted that Sandisk is now worth roughly $260 billion, several times the size of the names it displaced, which makes the promotion a confirmation of the past year rather than a new catalyst. The distinction worth keeping is between one-off rebalancing demand and durable earnings power.

Analyst Targets and an Easier Macro Backdrop

Sell-side positioning shifted noticeably in September. Rosenblatt analyst Kevin Cassidy argued that new AI compute platforms are repositioning NAND flash from a commodity storage medium into a more system-critical part of AI infrastructure. As Invezz reported, the $2,400 target implies more than 35% upside from Sandisk's September 21 close of $1,766.64, while Stifel kept a buy rating and a $1,500 target on Micron, expecting results and guidance above consensus. Earlier, J.P. Morgan analyst Harlan Sur resumed coverage of Sandisk at buy with a $2,250 target, citing a structural increase in NAND demand tied to AI inference.

The macro layer helped as well. Softer oil prices and lower yields relieved pressure on valuations, technology shares rebounded, and memory names moved the most because they carry the most beta. That transmission is fast, which is exactly why it is also reversible.

Earnings Have Turned the Narrative Into Cash Flow

Sandisk: $8.97 Billion in a Quarter, With Datacenter as the Engine

According to Sandisk's fiscal fourth quarter results published on August 5, quarterly revenue reached $8.97 billion, up 51% sequentially, with GAAP net income of $6.90 billion, or $43.97 per diluted share, and non-GAAP diluted EPS of $39.25. The company attributed roughly one third of the sequential increase to volume and two thirds to higher pricing. Full-year revenue came in at $20.25 billion, up 175%, with GAAP net income of $11.43 billion against a loss in the prior year. Datacenter revenue grew 437% for the year, the clearest structural change in the mix.

The same release carried two items that alter how the stock is priced. The board approved an additional $14 billion buyback, bringing remaining authorization to $15.5 billion, and management guided fiscal first quarter 2027 revenue to a range of $10.30 billion to $10.80 billion with non-GAAP diluted EPS of $44.00 to $46.00, implying that the pricing effect continues into the current quarter. On the technology side, Sandisk and SK hynix released the first High Bandwidth Flash technical specification through the Open Compute Project on August 3, with Google and Tenstorrent joining the workstream. Whether that architecture reaches volume deployment is one of the better tests of whether NAND's valuation floor has permanently moved up.

Micron: $41.46 Billion in Revenue and a $50 Billion Guide

Micron's results for the quarter ended May 28, released on June 24, showed revenue of $41.46 billion against $23.86 billion in the prior quarter and $9.30 billion a year earlier, GAAP net income of $28.24 billion or $24.67 per diluted share, non-GAAP EPS of $25.11, and operating cash flow of $25.39 billion. Company materials stated that DRAM and NAND industry demand continues to significantly exceed industry supply, with datacenter revenue above $25 billion and datacenter SSD revenue above $5 billion in the quarter.

The prepared remarks contain the detail that matters most now. Guidance calls for revenue of $50.0 billion plus or minus $1.0 billion, gross margin around 86% and EPS of $31.00 plus or minus $1.00, with management explicitly noting that the margin outlook reflects a meaningful moderation in the pace of price increases. CNBC reported that chief executive Sanjay Mehrotra expects roughly half or more of company revenue to fall under binding strategic customer agreements as those deals are completed. Such contracts improve predictability, at the cost of capturing less of a fast-rising spot market. The company has confirmed that the next set of results arrives on September 30.

The Variable That Matters Is the Second Derivative

Prices Are Still Rising, but More Slowly

TrendForce surveys give the cleanest quantitative track of this cycle. For the first quarter of 2026, the firm lifted its conventional DRAM contract price forecast from 55% to 60% up to 90% to 95% quarter on quarter, with NAND revised from 33% to 38% up to 55% to 60%. In the second quarter, DRAM contract prices were projected to rise 58% to 63% and NAND 70% to 75%, the first time in this cycle that NAND outpaced DRAM. For the third quarter, the picture changed: DRAM was forecast to rise 13% to 18% and NAND 10% to 15%, because record contract prices have pushed PC and smartphone buyers to the edge of what they can absorb.

Reading those numbers precisely matters. Price levels are still climbing, but the rate of climb has fallen sharply, and equity prices over the past year have been discounting acceleration rather than level. Micron's own language about moderating increases points the same way. For businesses with this much operating leverage, a move from roughly 70% quarterly increases to roughly 10% suggests the margin expansion phase is largely behind, leaving volume and mix to carry profit growth.

Demand-Side Support Remains Intact

The supply gap has not closed. In research published in August, TrendForce estimated that major cloud service providers will raise capital expenditure 98% in 2026 and another 50% in 2027, with DRAM and NAND together accounting for 47% of that spending in 2026 and 68% in 2027. Server DRAM contract prices are projected to rise roughly 270% across 2026, and enterprise SSD prices around 235%. The same firm has repeatedly noted that meaningful new capacity is unlikely to arrive in volume before late 2027 or 2028.

That is why management language at both companies has shifted from strong demand to insufficient supply. It is also why the market is willing to treat current profits as a baseline rather than a peak. Whether that assumption holds determines how much margin of safety exists in today's prices.

What It Means for Investors

A Low Multiple Near the Top Is Rarely Cheap

Memory stocks look cheapest when earnings are best. When EPS multiplies within a year on the back of pricing, forward multiples collapse into single digits and stop carrying information. The question worth answering is how long the current price level, gross margin and product mix can hold, and how fast profit would contract if prices roll over. Operating leverage magnifies results in both directions, and only twelve months separate Sandisk's prior-year loss from this year's eleven-figure profit.

The Two Names Do Not Carry the Same Exposure

Sandisk is the purer NAND expression, with more earnings and share price sensitivity and less cushion if NAND contract prices peak. Micron spans DRAM, HBM and NAND, where high bandwidth memory and datacenter products provide a stronger technical moat and long-term agreements make revenue more predictable, though those same agreements cap how much of a spot price surge the company can capture. Sandisk is closer to a high-beta bet on price; Micron is closer to a structural bet on AI compute attach rates. For investors who follow both crypto and AI infrastructure, memory also serves a second purpose as a high-frequency gauge of whether the AI capital expenditure cycle is still expanding, a cycle that tends to move with the broader liquidity backdrop for risk assets. On platforms such as MEXC, where crypto sits alongside tokenized equities and ETFs, that cross-asset view is easier to act on in practice.

From Crypto to Stocks: The Handbook for Putting the AI Storage Trade in the Same Account

Risks, Scenarios and What to Watch

Risks That Do Not Show Up in the Price Charts

Supply-side developments deserve the closest tracking. Invezz reported that China's CXMT has begun producing HBM3E in small quantities while YMTC continues to expand in NAND, news that knocked both Micron and Sandisk in early September trading. Analysts generally argue that tight overall supply limits the near-term impact, but the direction of capacity additions shapes expectations for 2027 pricing.

Demand carries its own hazard. When contract prices climb high enough that device makers cut configurations, delay purchases or redesign product lines, the odds of double ordering in the channel rise, and shortages historically end faster than they begin once restocking stops. Technical risk is present too, since passive demand fades after a rebalance completes, insider selling continues, and earnings dates concentrate volatility. Tariffs and geopolitics remain difficult to quantify but hard to ignore.

Three Scenarios

In a continuation scenario, AI inference deployment keeps outrunning supply, fourth quarter contract prices edge higher, Micron beats and guides above consensus, and Sandisk delivers its first ten-billion-dollar quarter. Support for the shares then shifts from flows back to earnings.

In a deceleration scenario, quarterly price gains flatten toward zero while absolute prices stay high. Profits remain large, but multiple expansion becomes hard to justify and the group likely moves sideways with widening dispersion between names.

In a reversal scenario, cloud providers slow the pace of spending or new Chinese capacity arrives alongside customer inventory releases, and contract prices decline sequentially. Because operating leverage runs both ways, earnings revisions would be far steeper than the price decline itself, which is the historical reason memory drawdowns are violent.

Dates and Data Points Ahead

The nearest test is Micron's release after the close on September 30. The point is not whether revenue reaches $50 billion but whether the 86% gross margin guide is met and how management frames pricing and bit shipments for the following quarter. Sandisk's next report then tests its pricing power against the $10.30 billion to $10.80 billion guidance range. At the industry level, TrendForce's fourth quarter contract price survey, cloud capital expenditure updates and the commercialization timeline for High Bandwidth Flash are the inputs that will define how long this cycle runs.

Exclusive View from James Mitchell

For James Mitchell, the important shift is in what the market is pricing. Until recently it traded an event, namely memory price inflation. It is now trading a judgment about how long scarcity lasts. The first can be verified against quarterly contract price data; the second rests on capacity timelines and long-term supply agreements, evidence that is inherently softer. Sandisk taking annual revenue to $20.25 billion and Micron taking quarterly revenue to $41.46 billion are settled facts. What happens next depends on whether those figures are treated as a starting point or a finish line.

The easiest thing for the market to misread is the difference between price level and price change. TrendForce data show quarterly contract increases falling from the double- and high-double-digit range in the first half to the low teens in the third quarter, and Micron flagged the same moderation in its own guidance. For a business already operating near an 86% gross margin, additional price increases contribute far less at the margin, while any sequential decline gets amplified through operating leverage. The second misreading is valuation: a single-digit forward multiple during an earnings surge is not a margin of safety, it is the market's vote against the durability of those earnings.

What deserves the most attention from here is a short list of trackable measures: the rate of change in contract prices rather than their level, the realized share of cloud capital expenditure flowing into memory, and the proportion of each company's revenue covered by long-term agreements. On position management, index rebalances and earnings dates are when volatility concentrates, so sizing exposure by dollar value rather than share count, and scaling a single high-beta position against total portfolio volatility, usually does more work than trying to forecast direction.

Seen across assets, the memory cycle is becoming a high-frequency window into AI capital spending. If storage climbs toward roughly 68% of cloud capital expenditure in 2027 as TrendForce estimates, then marginal changes in memory prices and orders will register earlier than most software or application-layer indicators. For investors who also hold crypto, the value of that chain is not a direct price correlation but an early read on risk appetite and the pace of industrial investment.

FAQ

Why are Sandisk and Micron rising at the same time?

Both sit in the memory and storage chain, and their revenue depends heavily on DRAM and NAND pricing and shipments. AI server and inference demand has pushed contract prices to record levels, recent results converted that into record profits, and index rebalancing, higher analyst targets and an easing macro backdrop amplified the short-term move. That combination tends to move the group together.

How strong was Sandisk's latest fiscal year?

Company filings show fiscal 2026 revenue of $20.25 billion, up 175% year over year, and GAAP net income of $11.43 billion against a loss the prior year. Fourth quarter revenue was $8.97 billion, up 51% sequentially, with roughly two thirds of that sequential gain coming from pricing. Datacenter revenue rose 437% for the year, and the board approved an additional $14 billion buyback.

When does Micron report next, and what matters in the print?

Micron has confirmed results for the quarter ended in August will be released on September 30. Guidance calls for revenue of $50.0 billion plus or minus $1.0 billion, gross margin near 86% and EPS of $31.00 plus or minus $1.00. The market will focus less on the revenue number and more on whether the margin holds and how management describes pricing and bit shipment constraints for the coming quarter.

Will NAND and DRAM prices keep climbing?

TrendForce surveys show contract prices surging through the first half of 2026 before decelerating in the third quarter to 13% to 18% for DRAM and 10% to 15% for NAND, as consumer customers hit their affordability ceiling. The same research argues meaningful new capacity is unlikely before late 2027, so the supply gap persists. Direction and rate of change need to be assessed separately.

What does S&P 100 inclusion mean for Sandisk shares?

Inclusion forces funds tracking the index to rebalance, creating predictable demand that active investors typically anticipate, which explains part of the run into the effective date. That flow is a one-time event and does not change the company's earning power. After implementation, the driver reverts to the pricing cycle and reported results.

Does a low P/E mean memory stocks are cheap?

Not necessarily. Memory is a classic cyclical, and earnings that multiply during a price upswing compress forward multiples to unusually low levels, often near the profit peak. More useful questions are how long current prices and margins can hold and how far earnings would fall in a downturn. Operating leverage exaggerates the outcome in both directions.

Could Chinese capacity break this rally?

Reports indicate CXMT has begun small-scale HBM3E production while YMTC continues expanding in NAND, news that has already triggered pullbacks in the group. The prevailing view is that tight aggregate supply limits the near-term pricing impact, but the trajectory shapes expectations for 2027 supply and demand. Actual ramp speed and yields are the variables to track.

Disclaimer

The information above is provided for general market information and analysis only and does not constitute investment advice, financial advice, legal advice, tax advice or a recommendation to trade. Prices of crypto assets, equities and other related financial assets can fluctuate sharply, and past performance, technical indicators and on-chain data do not guarantee future results. Financial figures, guidance, pricing surveys and analyst targets cited here come from public disclosures and may be revised by later announcements or market developments, so the most recent official releases from the relevant companies and institutions should be treated as authoritative. Readers should conduct their own research and make decisions based on their own financial circumstances, investment objectives and risk tolerance, consulting a qualified professional where appropriate. The MEXC Crypto Pulse team accepts no liability for any direct or indirect loss arising from the use of this information.

About the Author

James Mitchell specializes in technical analysis, market trends, and trading strategies for both Bitcoin and altcoins. Based in London, he has over 10 years of experience in financial markets. Before joining MEXC Learn, James worked as a senior analyst at a leading European investment firm, where he developed expertise in risk management and quantitative trading. His transition to cryptocurrency markets began in 2017, and he has since become recognized for his data-driven approach. He holds a Master's degree in Financial Economics from the London School of Economics. His analytical approach combines traditional technical analysis with on-chain metrics to provide readers with actionable insights.

Areas of Expertise: Technical Analysis, Market Trends & Cycles, Trading Strategies, Bitcoin & Altcoin Analysis, Risk Management.

Research References

Sandisk

Sandisk Reports Fiscal Fourth Quarter 2026 Financial Results

Sandisk and SK hynix Advance Global Standardization of High Bandwidth Flash with Release of First OCP Technical Specification

Micron Technology

Micron Technology, Inc. Reports Record Results for the Third Quarter of Fiscal 2026

Micron Fiscal Q3 2026 Earnings Call Prepared Remarks

Micron Technology to Report Fiscal Fourth Quarter Results on September 30, 2026

Micron (MU) Earnings Report Q3 2026 (CNBC)

Sandisk Has Gained More Than 600% in 2026. It Still Has Room to Run, Rosenblatt Says (CNBC)

Memory Price Outlook for 1Q26 Sharply Upgraded (TrendForce)

AI Server Demand to Drive Memory Contract Price Increases in 2Q26 (TrendForce)

AI Server Demand Continues to Support Memory Prices in 3Q26, but Gains Moderate (TrendForce)

Memory Prices Soar; DRAM and NAND Flash to Account for 68% of Major CSP CapEx in 2027 (TrendForce)

Dell, Palo Alto, Arista, SanDisk to Be Added to S&P 100 at Open on 9/21 (TipRanks)

Why Are AI Memory Chip Stocks Micron, SanDisk, and SK Hynix Rising in Pre-Market Today, Sept. 18 (TipRanks)

Why Are Micron, SK Hynix, SanDisk Stocks Rising Today (Invezz)

Micron, SanDisk Stocks Slip Premarket as a New China Risk Emerges (Invezz)

Sandisk Joins the S&P 100 on Monday (The Motley Fool)

S&P Dow Jones Indices

SK hynix

Open Compute Project

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