Shares of Sandisk (SNDK 2.49%) jumped as much as 15.7% on Monday. There was no company-specific announcement driving the move.
Instead, enthusiasm appears to be compounding; investors are increasingly treating the stock as an artificial intelligence (AI) hardware play, and a series of upbeat analyst notes last week reinforced that narrative. Higher targets and ratings resets from Wall Street analysts position the company as a key beneficiary of soaring storage requirements tied to data-heavy AI workloads.
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Analyst enthusiasm and AI storage tailwinds
The day's surge followed on the heels of reports that major brokerages now see an extended upward cycle for memory and storage demand, with AI infrastructure requiring huge capacity. That points to firmer pricing and a richer product mix as cloud providers and hyperscalers prioritize ultra-high-capacity drives.
This has been enough to keep sentiment strong, even absent fresh news from Sandisk itself. Showing how the stock's big move over the last 30 days has been primarily sentiment-related, the company's last press release was Sept. 8.
At the same time, industry players have reportedly been raising prices across certain memory and storage products. This follows Sandisk's own NAND flash price hikes, announced earlier this month. The ability to pass through higher prices suggests strengthening demand and renewed pricing power in an industry that historically has been highly cyclical.
Valuation and the long view
After such a sharp run, expectations are high. Sure, as AI adoption reshapes hardware spending patterns, a move higher in the stock price is justified. But the stock's roaring move upward may have gone too far. Sustaining today's valuation won't be easy.
Despite still reporting losses, the company now commands a market cap of more than $16 billion. Given the high expectations baked into the stock, investors should demand rapidly rising demand and improving profitability.
