Sandisk surges on AI-driven earnings, extends Kioxia venture through 2034
Memory chipmaker secures NAND flash manufacturing capacity as AI infrastructure spending fuels demand
Sandisk shares rose 2.2% to $539.30 on Wednesday, extending a dramatic rally that has seen the memory chipmaker more than double in value since early January, as the company reported second-quarter profit and revenue growth fueled by artificial intelligence infrastructure spending and secured long-term manufacturing capacity through an extended joint venture agreement.
The stock closed at a new 52-week high, with 20.1 million shares changing hands, significantly above typical trading volumes. The advance builds on gains that have taken Sandisk from approximately $270 on January 5 to current levels, reflecting intensifying investor enthusiasm for semiconductor companies exposed to the AI buildout.
Second-quarter financial results showed profit and revenue jumping on AI-driven demand for memory chips, according to MarketWatch. The surge in demand comes as data center operators and technology companies accelerate deployment of AI systems, which require substantial memory and storage capacity to process and train large language models.
Sandisk's performance reflects a broader trend in the semiconductor industry, where memory chipmakers are benefiting from what analysts describe as a sustained AI infrastructure spending cycle. Memory and storage components are critical for AI servers, with NAND flash chips used in solid-state drives that handle the massive datasets required for machine learning applications.
Separately, Sandisk announced that Kioxia and Sandisk have extended their Yokkaichi joint venture agreement through 2034, securing long-term NAND flash manufacturing capacity, according to BusinessWire. The extension provides supply chain certainty and production stability for both companies through the end of the next decade.
The Yokkaichi facility in Japan is a critical manufacturing hub for NAND flash memory, a type of non-volatile storage technology widely used in smartphones, computers, and data center equipment. Securing capacity through 2034 positions Sandisk to meet anticipated demand as AI applications proliferate across enterprise and consumer markets.
Analysts have maintained a largely positive outlook on Sandisk despite the stock's rapid ascent. The current consensus price target of $418.25 is below the stock's trading level, with 14 analysts rating shares a buy or strong buy compared to six hold recommendations, according to market data. The stock's forward price-to-earnings ratio of 37.17 reflects investor expectations for continued growth.
Sandisk's market capitalization has expanded to approximately $70.6 billion, with institutional investors holding 87.4% of outstanding shares. The company's trailing twelve-month revenue of $7.78 billion represents 22.6% year-over-year growth, though earnings have declined 48.5% over the same period as the company invests in capacity expansion.
The dramatic rally from the January lows—when shares traded around $270—has created one of the most pronounced recoveries in the semiconductor sector this year. Technical indicators show the stock trading well above its 50-day moving average of $282.73 and 200-day moving average of $125.28, suggesting strong momentum but also raising questions about near-term valuation levels.
Looking ahead, investors will focus on the durability of AI-related demand and the company's ability to maintain margins while expanding production capacity. The joint venture extension with Kioxia provides a foundation for long-term growth, though competition in the NAND flash market remains intense with players including Samsung Electronics, SK Hynix, and Micron Technology all vying for market share in the AI infrastructure buildout.