Storage is "flying"! SanDisk, the “strongest U.S. stock market,” rose more than 10%, while Micron, Western Digital, Seagate Technology, etc. all rose sharply.

**Source**: Wall Street Insights

**By Ye Zhen**

U.S. listed storage stocks collectively soared to record highs, with SanDisk surging 10.63% in a single day and skyrocketing 82% year-to-date. Analysts believe that the insatiable demand for high-performance storage driven by AI infrastructure construction, coupled with major manufacturers' production cuts to sustain prices, has fundamentally reversed the market's supply-demand dynamics. The industry is shifting from its traditional cyclical volatility to an OEM-like model characterized by "high profits and stable prices", and the upward price trend is expected to further intensify in 2026.

The U.S. storage chip sector staged another rally on Wednesday, with the share prices of major manufacturers hitting all-time highs across the board. Fueled by the surging demand and supply shortage of storage chips amid the AI boom, the global storage market is ushering in a new round of robust "super cycle".

On Wednesday, the U.S. storage chip sector delivered a standout performance. Among the key players, SanDisk rocketed 10.63% in a single day to a fresh all-time high; Micron Technology climbed 6.6%, also setting a new record; Western Digital jumped over 8.5%, and Seagate Technology rose more than 5.6%. This broad-based surge reflects strong market expectations for the return of pricing power and a sharp rise in profitability in the storage industry.

The core driver behind this rally stems from Wall Street's recalibration of valuations for storage giants. Multiple brokerages have raised their target prices for SanDisk and Micron, pointing out that robust enterprise-grade SSD demand and tight NAND flash supply are driving up product prices. Analysts widely agree that the soaring demand for high-performance storage from AI infrastructure projects, combined with production cut strategies adopted by major manufacturers to prop up prices, has brought about a fundamental reversal in the market's supply-demand structure.

Despite concerns over historically high valuations, against the backdrop of chip giants slashing output to maximize profits and spot prices surging severalfold, investors are betting that the industry is transitioning from its traditional cyclical fluctuations to an OEM-like model featuring "high profits and stable prices". Market consensus holds that, given the severe supply gap, the upward trend of storage chip prices will continue to deepen in 2026.

### SanDisk Surges Over 10% in a Day, 80% Gain Year-to-Date

As the recent leader in the U.S. tech sector, SanDisk has demonstrated explosive momentum. Since its spin-off from Western Digital and listing in February 2025, its share price has surged more than tenfold. In just 11 trading days of 2026, SanDisk's stock has rallied over 82%, earning it the title of "the most sought-after tech stock of 2026" by Zacks Investment Research.

This stock price surge is directly fueled by analysts' substantial target price hikes. Citigroup raised SanDisk's target price from $280 to $490, citing strong enterprise SSD demand and favorable supply conditions. Bernstein boosted its target price significantly from $300 to $580, emphasizing tight NAND supply and rising storage prices, and noting that SanDisk is a major near-term beneficiary of AI-driven demand.

SanDisk's fundamentals also underpin this bullish sentiment. According to Zacks' forecast, SanDisk's fiscal 2026 sales are expected to jump 42% to $10.45 billion, and its annual earnings per share (EPS) are projected to soar 350% from $2.99 in 2025 to $13.46. Despite the sharp stock price rally, SanDisk currently trades at a forward price-to-earnings ratio of 30 times, roughly in line with peer Western Digital and the S&P 500 benchmark, showing no obvious signs of a bubble. Market views suggest that the current rally is more driven by industry-wide AI optimism and valuation re-rating from analyst revisions, rather than any deterioration in the company's fundamentals.

### Industry-Wide Valuation Rewrite: Micron and Western Digital Also Hit New Highs

Beyond SanDisk, the entire storage sector is caught up in a wave of valuation re-rating. Micron's share price rose 6.6% on Wednesday, hitting an intraday all-time high. The company has been steadily capturing market share from competitors in both DRAM and NAND segments, especially in the high-bandwidth memory (HBM) space critical to AI, where its market share has increased by 10 percentage points over the past year.

Micron's financial results attest to the industry's recovery. Its fiscal Q1 2026 revenue grew 20%, adjusted EPS surged 167%, and gross margins expanded significantly, demonstrating strong pricing power. CEO Sanjay Mehrotra explicitly stated that the construction of AI data centers has driven a sharp increase in demand, and the industry's total supply will face a severe shortage in the foreseeable future.

Famous financial commentator Jim Cramer pointed out that although Micron has risen more than 600% since 2023, given that equipment shortages limit capacity expansion and its 32-times price-to-earnings ratio is relatively reasonable, the stock still has room for further upside.

Meanwhile, the share prices of Western Digital and Seagate Technology also rallied sharply, climbing 8.49% and 5.6% respectively. Analysts noted that while HDDs (hard disk drives) lag behind SSDs in terms of speed, the demand for large-capacity storage from AI infrastructure has also benefited this segment.

### AI Ignites "Super Cycle" as Storage Chip Prices Soar

The macro backdrop of this market rally is the supply-demand imbalance and skyrocketing prices in the global storage chip market.

As previously reported by Wall Street Insights, according to Omdia data, despite the surging AI demand, Samsung Electronics and SK Hynix, which together account for over 60% of the global NAND market, still plan to cut NAND production this year to maximize profits. Capital expenditures are being prioritized toward high-margin DRAM and HBM products, leading to a severe shortage in the supply of NAND and traditional DDR4 memory.

Price data directly reflects this tightness. A Bank of America Securities report showed that DDR4 spot prices have recently experienced drastic fluctuations, with some specifications surging more than 2000% year-on-year, and a rare "inversion" phenomenon has emerged where DDR4 prices are higher than the more advanced DDR5. TrendForce predicts that NAND flash contract prices will rise 33% to 38% quarter-on-quarter in the first quarter of this year.

This structural shortage is spreading to downstream industries. Wells Fargo pointed out that the automotive industry is facing new cost pressures and supply disruption risks, as chip manufacturers prioritize meeting the needs of higher-margin data center and AI customers. William Li, Chairman of NIO, and Lei Jun, Chairman of Xiaomi Group, have both publicly stated that rising memory prices have brought enormous cost pressures to automakers.

Bank of America Securities believes that the storage chip industry is undergoing profound transformation, showing the characteristics of an "OEM-like" model with reduced cyclicality and improved profit margins. With strong earnings guidance from upstream manufacturers such as TSMC and sustained growth in South Korea's semiconductor export data, the market generally agrees that the storage industry has entered a profit-driven "super cycle". Although facing the risk of high valuations in the short term, the long-term valuation re-rating process is still ongoing.

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