Why Sandisk's stock just soared to its best day in 11 months

By Emily Bary

Memory and storage stocks reigned supreme in 2025 and are leading the pack once again to start 2026

Sandisk shares soared anew on Tuesday.

The hottest corner of the artificial-intelligence trade keeps getting hotter.

The biggest recent beneficiaries of AI excitement haven't been makers of core AI processors like Nvidia (NVDA) and Advanced Micro Devices (AMD), but rather makers of memory and storage components. With increases of more than 200% each, Western Digital (WDC), Micron Technology (MU) and Seagate Technology Holding (STX) shares were the three biggest gainers in the S&P 500 SPX in 2025, when looking at companies that were in the index for the duration of the year.

Sandisk (SNDK), which only became an independent company last February and joined the S&P 500 SPX midway through the year, saw its stock explode more than 550% higher over its trading lifetime in 2025.

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As AI demand grows and applications become more powerful, that boosts the need for memory and storage components. The trend also has been lifting prices for the major players.

And 2025's biggest winners are only adding to their gains in 2026. Sandisk's stock shot 27.6% higher on Tuesday, for its best day since a 28.7% rally on Feb. 18, 2025, according to Dow Jones Market Data.

Mizuho trading-desk analyst Jordan Klein attributed the move to "bullish comments" from Nvidia CEO Jensen Huang in a Monday CES speech. Huang talked about "how important memory will be for AI use cases and inferencing like long reasoning and [key-value] cache to recall all user inquiries with agentic AI," Klein told MarketWatch in emailed comments.

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The value of memory was clear in Nvidia's written CES announcements, which included mention of a new "inference context memory storage platform" that the company said "enables efficient sharing and reuse of key-value cache data across AI infrastructure."

Sandisk "also spoke to investors yesterday and sounded very good on demand and longer-term supply agreements," Klein added.

The storage company on Monday announced new branding for its solid-state drives, including what are now known as the Optimus GX PRO drives. That offering "represents the pinnacle of performance," according to a Sandisk release, which added that the drives "are designed for developers, professionals and gamers in the pursuit of the latest technological breakthrough and uncompromising performance who are looking to build AI PCs, workstations, or high-end PCs."

But Sandisk's Tuesday stock action could have more to do with general momentum for the storage and memory trades. Micron's stock rose 10%, while Western Digital's gained about 17% and Seagate advanced 14%.

Just a few days into January, Sandisk's stock is leading the S&P 500 pack once again with a 40% year-to-date gain. Western Digital's stock ranks second, up 22%.

Read: Micron's stock is an S&P 500 standout by this metric, as memory prices boom

-Emily Bary

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01-06-26 1829ET