Sandisk (SNDK +7.60%) stock got caught up in an epic sell-off last week as semiconductor stocks lost $1 trillion in market capitalization. Sandisk crashed 11.4% Friday -- but today it's bouncing back.
Shares of the NAND memory chips manufacturer gained 4.6% through 9:40 a.m. ET Monday, and investors can thank Nvidia (NVDA +1.61%) CEO Jensen Huang for this. Huang says we are still just at "the outset of the AI revolution," which has more room to run.
Image source: Getty Images.
Nvidia finds a friend
Matching Nvidia's actions to Huang's words, Nvidia today announced a "multi-year technology partnership" with South Korean memory chip-maker SK Hynix. Aiming to build a global system of "AI factories," the two companies will collaborate on advanced memory (and also advanced fabrication with the capital investment needed to make it happen).
Moreover, in a virtuous circle, Nvidia plans to use its own artificial intelligence to design new AI chips that in turn make its AI smarter.... so that it can design even better AI chips in the future. SK Hynix's role will be to align its new memory chips with Nvidia's AI chips. Going forward, SK Hynix chips will be used in "Vera Rubin AI supercomputers, Vera CPUs, RTX Spark-powered PCs and Jetson Thor robotic computing platforms."
NASDAQ: SNDK
Key Data Points
What does this mean for Sandisk?
Now here's where things get weird. Two separate Wall Street analysts decided to raise their price targets on Sandisk in the wake of this news. Bank of America raised its PT to $2,100 per share, while Mizuho raised its target to $2,200.
Analysts cite strong memory prices as supporting the price targets, but still, I wonder: If Nvidia is tying up with SK Hynix as a preferred provider of memory, is that really good news for Sandisk?
Because I kind of think it isn't.
