[Business&Issue] Once Left Out of the AI Rally... SanDisk Shares Surge Fivefold

Stock Price Surges Fivefold After Relisting
Sales Soar Amid AI Data Center Boom

SanDisk Homepage

The stock price of SanDisk, a US-based company specializing in NAND flash memory semiconductors, has surged more than fivefold since its relisting in February. Although it was initially left out of the artificial intelligence (AI) rally until the first half of this year, the recent global boom in building AI data centers has fueled expectations of increased demand for data storage devices, leading to a significant rise in its share price. Experts note that while the short-term surge brings volatility risks, they expect mid- to long-term earnings improvements, suggesting further upside potential for the stock.

Riding the AI Rally Since September... AI Data Centers Drive Growth

This year, SanDisk's stock price fluctuated between $30 and $40 from its Nasdaq relisting in February until the end of August. Previously, SanDisk was delisted after being acquired by Western Digital in 2016, but was spun off from WDC and relisted on February 24 of this year. Until the first half of the year, the company showed sluggish performance, partly due to the aftermath of the spin-off and being relatively overlooked within the AI sector.

However, since September, as a construction boom for AI data centers began, SanDisk has emerged as a leading player in the AI rally. On the 13th (local time), its stock closed at $243.57, soaring fivefold from the $48.60 recorded at the time of its Nasdaq relisting. This sharp increase was driven by robust sales growth, as demand for SanDisk's main products-data storage devices-rose significantly.

SanDisk reported revenue of $2.308 billion for the first quarter of its 2026 fiscal year (July-September 2025), up 23% from the same period last year, surpassing the market expectation of $2.15 billion. Net profit reached $112 million, marking a turnaround from a $23 billion loss in the previous quarter. However, operating profit fell 39% to $176 million, which SanDisk attributed to a temporary increase in costs associated with expanding its data center business and supporting the development of high-bandwidth flash memory (HBF) and other new products. With growing expectations for continued revenue growth, the stock price has risen sharply.

A Traditional Powerhouse in NAND Flash Memory... Essential for Data Centers

SanDisk Homepage

According to CNBC, SanDisk, founded in 1988, specializes in the production of storage devices based on NAND flash, such as hard disk drives (HDDs) and solid-state drives (SSDs) for both personal and enterprise use. Through the 2010s, the company focused on selling low-cost memory semiconductor products like SD cards for digital cameras and USB flash drives.

In October 2015, Western Digital announced its acquisition of SanDisk for $19 billion (approximately 28 trillion won), completing the deal in May 2016. SanDisk was subsequently merged into Western Digital and delisted, remaining only as a product brand. Discussions about spinning off the company resumed in October 2023, and the separation was completed in February of this year.

The main reason Western Digital spun off SanDisk again was the renewed surge in demand for NAND flash, driven by the rising popularity of generative AI. As AI programs require the speed and efficiency of NAND flash over other storage devices, the previously sluggish NAND flash market has been revitalized. Additionally, as the supply shortage of HDDs-essential data storage devices amid soaring AI demand-has persisted, orders have increasingly shifted to SanDisk.

Short-Term Surge Brings Risks, but Revenue Growth Expected to Continue

AFP Yonhap News

Experts acknowledge that SanDisk's rapid short-term share price surge poses risks but believe there is still room for further gains. In particular, the ongoing supply shortage of NAND flash, SanDisk's main product area, is expected to sustain revenue growth going forward.

According to The Wall Street Journal (WSJ), demand for NAND flash is projected to steadily increase as the AI data center construction boom expands not only in the US and China but also across the Middle East and other regions worldwide. Morgan Stanley recently reported that "34% of global NAND flash production will be used for AI purposes by 2029," and predicted that "new demand worth $29 billion (about 42 trillion won) will be created."

SanDisk is expected to benefit significantly from the ongoing supply shortage of NAND flash at least through next year. Blaine Curtis, an analyst at global investment bank Jefferies, stated, "The price trend in the NAND flash market is turning in favor of SanDisk," adding, "The supply shortage is likely to persist through next year, and SanDisk will have significant pricing power in the NAND flash market for a considerable period."