SanDisk Soars 143% in January as AI Boom Fuels Memory Supply Crunch
Shares of SanDisk (NASDAQ: SNDK) staged a breathtaking rally in January, surging 143% as a severe supply crunch in the memory sector, driven by voracious AI demand, sent prices and investor sentiment soaring. The stock's remarkable performance, which saw gains in nearly every trading session, was less about company-specific announcements and more a direct beneficiary of an industry-wide tidal wave.
The catalyst became unmistakable early in the month. On January 6, the stock logged its biggest single-day jump after Nvidia CEO Jensen Huang declared AI storage a "completely unserved market" poised to become the world's largest. This was swiftly followed by research firm TrendForce projecting a staggering 33%-38% hike in NAND flash contract prices for the first quarter. Days later, investment bank Nomura reported that SanDisk was planning to double prices for its high-capacity 3D NAND devices this quarter, triggering another leap in the share price.
Wall Street took note, with multiple analysts racing to upgrade price targets. SanDisk delivered the validation at month's end, reporting second-quarter results that demolished expectations. Revenue hit $3.03 billion, a 61% year-over-year surge, while adjusted earnings per share exploded to $6.20 from $1.23 a year ago. The driver was crystal clear: adjusted gross margin ballooned to 51.1% from 32.5%, a direct result of favorable pricing power.
"Our products play a critical role in powering AI," stated CEO David Goeckeler, underscoring the company's positioning. The outlook was even more stunning, with third-quarter guidance forecasting revenue of up to $4.8 billion and adjusted EPS potentially doubling to $14.
While the memory market is notoriously cyclical, analysts suggest this upswing, fueled by structural AI demand, may have legs for several more quarters. The combination of constrained supply, soaring prices, and exploding profitability presents a powerful case for the rally's continuation.
Market Voices: Reactions to the SanDisk Surge
Eleanor Vance, Portfolio Manager at Clearwater Capital: "This isn't just a cyclical bump. We're witnessing a fundamental re-rating of memory stocks as the AI narrative shifts from pure computation to data infrastructure. SanDisk's margins tell the story of a sector in acute shortage."
Marcus Thorne, Independent Tech Analyst: "The guidance is frankly explosive. It confirms that pricing momentum isn't just theoretical; it's flowing directly to the bottom line. This could be the start of a multi-quarter upgrade cycle for earnings estimates across the sector."
Dr. Anya Sharma, Economics Professor at Carlton University: "While the AI-driven demand is real, a 143% move in a month reeks of speculative frenzy. Investors are piling in based on future pricing assumptions that are highly fragile. One sign of inventory buildup or demand moderation, and this house of cards could wobble. The memory industry hasn't repealed the laws of economics."
Ben Carter, Retail Investor & Founder of 'Next Gen Tech' Forum: "It's brutal watching from the sidelines. I've been waiting for a pullback that never comes. The market is pricing in perfection, and stories like this make you feel like you're missing the single biggest trade of the decade. The FOMO is real."