Sandisk (NASDAQ:SNDK) just logged its biggest single-day gain in nearly a year, soaring 27.6% to a record $349.63. It was the best-performing stock in the S&P 500 on Tuesday, capping an 800% rally since its spinoff from Western Digital less than a year ago. Investors piled into the flash memory maker after Nvidia’s CES keynote Monday night highlighted a new memory storage platform for AI workloads. The announcement sent ripples across the storage sector, with Western Digital and Seagate also climbing 16.8% and 14% respectively. While the excitement is clearly about AI and Sandisk’s strategic positioning in SSDs, the timing also coincides with expectations for strong memory pricing ahead of Samsung and SK Hynix’s earnings. Traders are betting on tight supply, growing demand, and higher margins. But the question now is: can Sandisk keep the momentum going, or is this as good as it gets in a cyclical market that might normalize in a few years?
Nvidia’s CES AI Reveal Sparks Storage Euphoria
The spark that lit the fuse for Sandisk stock surge AI came from an unlikely source: Nvidia (NASDAQ:NVDA). At its CES 2026 keynote, Nvidia introduced a new AI memory storage platform designed to accelerate Rubin, its next-gen inference chip. The platform features high-performance SSDs to optimize throughput and reduce latency. That single mention sent shockwaves through the flash memory sector.
Morningstar analyst William Kerwin described the impact simply: “More SSD demand for these systems would imply even tighter supply than we have right now, further boosting SNDK’s pricing.” Susquehanna’s Mehdi Hosseini echoed that view, pointing to Nvidia’s signal as the likely driver of Sandisk’s rally. Nvidia didn’t name Sandisk directly, but investors read between the lines: Sandisk, now untethered from Western Digital, has been actively pushing its BiCS8 SSDs for hyperscale AI use cases.
These comments come at a time when AI infrastructure investments are projected to exceed $1 trillion by 2030. Nvidia’s endorsement of SSD-centric architectures bolsters the case for Sandisk’s position in AI infrastructure, making the rally more than just speculative froth. The Sandisk stock surge AI narrative now has a tangible technological endorsement to anchor itself to.
Enterprise SSD Demand Driven By AI Infrastructure Buildout
Sandisk’s Q1 FY2026 results underscored the strength of its data center business, which saw 26% sequential growth and is expected to continue ramping through fiscal 2026. The company’s power-efficient, high-capacity BiCS8-based SSDs have seen strong uptake from hyperscalers and OEMs, with 5 major hyperscale customers in active qualification phases.
Executives noted that customers are reaching out to secure long-term SSD supply—a shift from traditional quarter-by-quarter orders. This change reflects the new AI datacenter reality. As enterprises shift from training to inference workloads, storage becomes the bottleneck, and fast, efficient SSDs are no longer optional. Sandisk’s enterprise-grade Stargate drives, especially the 128TB and 256TB variants under development, are positioned to capitalize on this shift.
Moreover, Sandisk’s HBF (high-bandwidth flash) roadmap, aimed at inference applications, could unlock new categories of demand, especially at the edge. The company estimates QLC (quad-level cell) products will go from 20% to 40% of its mix by the end of FY2026. That kind of inflection makes the Sandisk stock surge AI narrative more than a one-day trade. It’s rooted in long-term strategic product cycles.
Tight Flash Supply & Rising Memory Prices Ahead Of Samsung Results
The flash memory market is officially tight. Sandisk management confirmed that NAND supply is fully allocated across all business segments, with utilization at 100%. Inventory days have dropped from 135 to 115, and customers are scrambling to lock in SSD shipments through 2027. Prices for NAND flash have already risen double digits, with more hikes expected as capacity remains capped.
That sets the stage for upcoming earnings from major memory players. Samsung Electronics and SK Hynix are expected to report strong Q4 results, with analysts forecasting DRAM prices up 25.5% quarter-over-quarter and flash memory prices up nearly 15%. While Sandisk doesn’t make DRAM, the read-through on pricing power and margin expansion benefits the whole sector.
On the recent earnings call, Sandisk projected gross margins of 41-43% for Q2, up from 29.9% in Q1, driven primarily by pricing and BiCS8 cost efficiencies. Free cash flow was $448 million in Q1 alone. The company reached net cash position six months ahead of schedule. This pricing tailwind may continue as long as demand outpaces wafer supply—a scenario Sandisk expects to persist beyond 2026.
Still, Morningstar’s Kerwin urged caution, noting that memory pricing could normalize over the next three years, which would “bring profitability and growth back down to earth.” The Sandisk stock surge AI narrative looks strong now, but memory is a famously cyclical business.
Peer Sympathy Gains & Market Mechanics Boosted Sandisk’s Pop
Sandisk wasn’t the only name flying high. Western Digital (NASDAQ:WDC), its former parent, jumped 16.8% to a record close. Seagate Technology (NASDAQ:STX) rose 14% to finish at an all-time high. These spillover gains reflect a broader bullish sentiment in the storage space, where both HDD and SSD players are expected to benefit from the AI boom.
The rally also had a technical component. Sandisk recently joined the S&P 500, meaning passive funds had to accumulate shares. With float constrained and momentum traders piling in, the Sandisk stock surge AI thesis was amplified by mechanics unrelated to fundamentals.
Add to that a low institutional ownership base—still recovering post-spinoff—and you get the kind of short-squeeze-y move we saw Tuesday. As memory prices recover and hyperscaler orders stretch into 2027, investors are reassessing the value of legacy storage names once written off as commodities.
That said, it’s worth noting that much of the sector’s price appreciation may already be baking in peak expectations. For Sandisk to justify these gains, execution will need to remain flawless, especially as BiCS8 ramps and enterprise SSD share targets are pursued.
Final Thoughts: Valuation Matters, Even In An AI Boom
Sandisk’s 27% jump is a reminder of how fast narratives can change in tech. The company is benefitting from AI-driven demand for SSDs, Nvidia’s CES storage commentary, and broader flash pricing momentum. With hyperscalers seeking long-term supply agreements, and gross margins guided to 40%+, there are real tailwinds.
But let’s keep perspective. The flash memory market is cyclical. What looks like tight supply today could flip with capacity additions or demand pullbacks. Morningstar’s lone bearish voice warns that normalized pricing may drag growth over time.
Valuation is also creeping up. On a trailing basis, Sandisk is trading at 5.16x P/S, 75.87x EV/EBITDA, and a staggering 104.37x EV/EBIT. These are peak-cycle numbers. Even on a forward basis, its P/E is above 20x, and EV/EBITDA sits at 11.24x. If pricing cracks, these multiples could compress quickly.
The Sandisk stock surge AI narrative is compelling, and the company has executed impressively. But from here, the upside story has to shift from hope to delivery—on margins, on SSD share, and on disciplined capital returns. Long-term investors will need to separate the signal from the semiconductor sizzle.
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