SanDisk Stock Jumps 28% After Nvidia CEO Highlights Storage Demand

• SanDisk shares surged 28% Tuesday after Nvidia CEO Jensen Huang called AI storage "the largest storage market in the world".
• Memory prices are spiking with SSD costs projected to rise over 40% in Q1 due to AI-driven shortages.
• Analysts forecast SanDisk's 2026 revenue growth above 45% and EBITDA expansion over 200% year-over-year.
• Despite the 648% six-month rally, valuation concerns persist due to stretched P/S multiples and negative margins.

SanDisk Corporation (SNDK) shares rocketed 28% higher on Tuesday, marking their best single-day performance in 11 months. The flash memory specialist's stock has now soared over 1,000% since its April 2025 low, fueled by relentless artificial intelligence demand. Nvidia CEO Jensen Huang's CES comments ignited the latest rally by pinpointing storage as AI's critical bottleneck. This vertical move caps an extraordinary run for the Western Digital spinoff.

Why Is Sandisk Stock Surging on AI Storage Demand?

Nvidia CEO Jensen Huang's CES keynote served as the immediate catalyst for SanDisk's explosive move. He identified data storage as a completely unserved market that will likely become the world's largest storage segment. Huang specifically emphasized memory's critical role for holding "the working memory of the world's AIs," directly boosting sentiment around storage stocks. His endorsement comes amid severe industry-wide supply constraints that are turbocharging pricing power.

Memory prices are climbing at unprecedented rates, with solid-state drive costs projected to surge over 40% this quarter. Samsung and SK Hynix are reportedly seeking server DRAM price hikes of 60-70%, signaling intense demand across the memory ecosystem. Bank of America analysts highlight storage companies as key beneficiaries of 2026's AI inferencing and edge computing expansion. Demand is skyrocketing as organizations retain more data for AI training, analytics, and compliance needs.

Can SNDK Maintain Its Momentum Amid Valuation Concerns?

SanDisk's valuation presents significant challenges following its 648% six-month surge. The company trades at premium sales multiples despite reporting negative net and EBITDA margins. Retail investor enthusiasm and social media momentum have amplified the rally, creating potential air pockets beneath current prices. Memory's notorious cyclicality means today's shortages could become tomorrow's glut when supply eventually catches up.

Analysts project robust growth with 2026 revenue expanding over 45% year-over-year. Management anticipates gross margins will leap to 41-43% next quarter from Q4's 26.4%. However, converting AI demand into sustainable profitability remains critical for justifying its valuation. The company must demonstrate an ability to navigate potential pricing volatility once current supply bottlenecks ease.

What Does the Future Hold for Sandisk in the AI Boom?

SanDisk's strategic pivot to AI infrastructure provides structural tailwinds. The company has shifted from consumer memory to focus squarely on high-performance storage solutions. Its newly launched 256TB NVMe enterprise SSD specifically targets AI's need for high-density, low-latency storage. Leadership in BiCS8 3D NAND technology further positions SanDisk at the forefront of AI storage innovation.

Bank of America expects storage demand to accelerate through 2026, particularly for edge applications like drones and autonomous vehicles. The expanding use of AI across surveillance, sports technology, and smart factories creates additional growth vectors. SanDisk has gained approximately two percentage points in NAND market share during this upcycle. Its ability to maintain this momentum while managing cyclical risks will determine long-term success.