Storage "Zhang Fei"! "The strongest in US stocks" Sandisk rises over 10%, Micron, Western Digital, Seagate Tech and others all surge

The U.S. stock market's storage sector exploded again on Wednesday, with major manufacturers' stock prices collectively reaching new historical highs. Driven by the surge in demand for storage chips due to the artificial intelligence boom and supply shortages, the global storage market is entering a new round of strong "super cycle."

On Wednesday, the U.S. stock market's storage chip sector performed remarkably. Among them, SanDisk surged 10.63% in a single day, setting a new historical high; Micron Technology rose 6.6%, also breaking historical records; Western Digital jumped over 8.5%, and Seagate Tech increased by more than 5.6%. This widespread rally reflects the market's strong expectations for the return of pricing power and soaring profitability in the storage industry.

The core driving force behind this round of increases comes from Wall Street's recalibration of valuations for storage giants. Several brokerages have raised their target prices for SanDisk and Micron, pointing out that strong enterprise-level SSD demand and tight NAND flash supply are driving up product prices. Analysts generally believe that the demand for high-performance storage driven by AI infrastructure construction, combined with major manufacturers' production cuts to maintain prices, has fundamentally reversed the market's supply-demand structure.

Despite concerns about valuations being at historical highs, in the context of chip giants cutting production to maximize profits and spot prices experiencing several-fold increases, investors are betting that the industry is shifting from traditional cyclical fluctuations to a "high profit, stable price" quasi-ODM model. The market generally expects that under severe supply shortages, the upward trend in storage chip prices will continue to deepen until 2026.

SanDisk Surges Over 10% in a Single Day, Year-to-Date Increase Reaches 80%

As a recent leader in the U.S. stock market's technology sector, SanDisk has shown remarkable explosive power. Since its spin-off from Western Digital in February 2025, its stock price has increased by more than tenfold. In just 11 trading days into 2026, SanDisk's stock price has cumulatively risen over 82%, being dubbed by Zacks Investment Research as "the most sought-after tech stock of 2026."

This surge in stock price is directly benefited from analysts' significant upward revisions of its target price. Citigroup raised SanDisk's target price from $280 to $490, citing strong enterprise-level SSD demand and favorable supply conditions; Bernstein significantly increased its target price from $300 to $580, emphasizing tightening NAND supply and rising storage prices, and pointed out that SanDisk is a recent major beneficiary of AI-driven demand.

SanDisk's fundamentals also support this optimistic sentiment. According to Zacks, SanDisk's sales for fiscal year 2026 are expected to grow by 42% to $10.45 billion, and the annual earnings per share (EPS) are projected to soar 350% from $2.99 in 2025 to $13.46. Despite the stock price surge, SanDisk's current forward P/E ratio is 30 times, roughly in line with industry peer Western Digital and the S&P 500 index benchmark, showing no significant bubble. Market views suggest that this increase is more based on industry AI optimism and the expectations reassessment brought by analysts' revisions, rather than a deterioration in the company's fundamentals

Comprehensive Revaluation of the Industry: Micron and Western Digital Hit New Highs

Except for SanDisk, the entire storage sector is undergoing a wave of value revaluation. Micron's stock price rose 6.6% on Wednesday, reaching an all-time high during the trading session. The company is continuously gaining market share from competitors in the DRAM and NAND sectors, particularly in the high-bandwidth memory (HBM) field, which is crucial for AI, where its market share has increased by 10 percentage points over the past year.

Micron's financial data confirms the industry's recovery. Its revenue for the first quarter of fiscal year 2026 grew by 20%, adjusted earnings per share increased by 167%, and gross margins significantly expanded, demonstrating strong pricing power. CEO Sanjay Mehrotra clearly stated that the construction of AI data centers has driven a sharp increase in demand, and the total supply in the industry will face severe shortages in the foreseeable future.

Renowned financial commentator Jim Cramer pointed out that although Micron's stock has risen over 600% since 2023, there is still room for growth given that equipment shortages limit capacity expansion and its price-to-earnings ratio of 32 times is relatively reasonable.

Meanwhile, Western Digital and Seagate Tech also saw significant stock price increases, rising 8.49% and 5.6%, respectively. Analysts noted that although HDDs (hard disk drives) are slower than SSDs, the demand for large-capacity storage driven by AI infrastructure also benefits this sector.

AI Ignites "Super Cycle": Storage Chip Prices Surge

The macro backdrop of this round of market activity is the supply-demand imbalance and soaring prices in the global storage chip market.

Wall Street Journal previously mentioned that according to Omdia data, despite the surge in AI demand, Samsung Electronics and SK Hynix, which hold over 60% of the global NAND market, still plan to cut NAND production this year to maximize profits. Capital expenditures are being prioritized towards higher-margin DRAM and HBM products, leading to severe shortages in NAND and traditional DDR4 memory.

Price data vividly reflects this scarcity. A report from Bank of America Securities shows that DDR4 spot prices have recently experienced dramatic fluctuations, with some specifications seeing annual increases of over 2000%, and a rare "inversion" phenomenon where DDR4 prices exceed those of the more advanced DDR5. TrendForce predicts that NAND flash contract prices will rise by 33% to 38% quarter-on-quarter in the first quarter of this year.

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

Bank of America Securities believes that the storage chip industry is undergoing a profound transformation, exhibiting characteristics of a "quasi-contract manufacturing" model with cyclical weakening and rising profit margins. With strong performance guidance from upstream manufacturers like TSMC and continued growth in South Korean semiconductor export data, the market generally agrees that the storage industry has entered a "super cycle" centered on profit margins. Despite facing high valuation risks in the short term, the long-term value revaluation process is still ongoing