For the second day in a row, Sandisk (SNDK +12.19%) stock is soaring, up 8% through 10:35 a.m. ET Tuesday.
Sandisk stock gained a strong 6% higher on Monday after analysts at Morgan Stanley sounded the all-clear for artificial intelligence stocks, confirming revenues are growing fast enough to provide AI hyperscalers the cash they need to buy the semiconductor chips they want. Today, Sandisk's getting an even more Sandisk-specific catalyst:
Its concept of using flash computer memory as a substitute for DRAM is catching on.
Image source: Getty Images.
Sandisk and SK Hynix collaborate
The concept is called "High Bandwidth Flash" (HBF), and it's analogous to how DRAM chips are stacked to create High Bandwidth Memory (HBM). Today, Sandisk announced it is partnering with Korean DRAM specialist SK Hynix (SKHY +8.04%) to create industry standards for HBF memory.
Alphabet (GOOG +0.75%) (GOOGL +1.13%), a hyperscaler ever-hungry for new alternatives to HBM -- which remains expensive and in short supply -- is joining a consortium of AI industry companies led by Sandisk and SK Hynix, too. The goal isn't to replace HBM so much as to supplement that technology and shore up supply deficits in HBM, while ensuring that HBM and HBF can cooperate effectively within the same system.
NASDAQ: SNDK
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What this means for Sandisk
Sandisk's expertise in producing NAND chips, also essential for AI inference functions (i.e., answering AI questions), has already lit a fire under Sandisk stock, which is up nearly 2,800% over the past 52 weeks. Expanding the use cases for NAND even further by making HBF a standard tool that AI hyperscalers can use will benefit Sandisk even more and help ensure that any extra production capacity Sandisk adds can be put to a new use that will keep profit margins high.
That makes this a good day to own Sandisk stock.
