:max_bytes(150000):strip_icc()/GettyImages-2250187408-d18587c2262340228f6ebf0926554b3a.jpg "Why Sandisk, Memory Stocks Have Soared While the AI Trade Treads Water")
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Key Takeaways
- Memory and data storage stocks soared in the first trading days of 2026, with the rally getting a boost on Tuesday after bullish comments from Nvidia CEO Jensen Huang.
- Data storage stocks have been on a tear for months, with booming demand and a severe supply crunch helping them to dodge the AI bubble concerns that have weighed on the rest of the AI ecosystem.
Big tech stocks may have lost some of their luster in recent months, but the first few sessions of 2026 suggest investors are still eager to chase momentum where they see it.
Data storage stocks skyrocketed earlier this week after Nvidia (NVDA) CEO Jensen Huang, speaking at the CES consumer electronics show in Las Vegas on Monday, highlighted the artificial intelligence industry’s huge demand for memory and storage hardware.
Shares of Sandisk (SNDK) soared more than 27% on Tuesday. The stock rose more than 500% in 2025, and added another 43% over the first three sessions of 2026. Western Digital (WDC) and Seagate Technology (STX) stocks, both of which tripled in value last year, advanced 17% and 14%, respectively, on Tuesday. (All three stocks gave back some of those gains Wednesday.)
Why This Matters
While artificial intelligence has been the dominant theme on Wall Street for three years, leadership within the AI rally has shifted as investors discovered new bottlenecks to the data center buildout currently underway. In recent months, investors have aggressively chased momentum in memory and data storage stocks.
Memory and storage stocks are outliers within the AI trade, which hit a rough patch in the final months of 2025 amid concerns about an AI bubble. Those worries haven’t disappeared with the changing of the calendar. As of Tuesday’s close, every stock in the Magnificent Seven except Amazon (AMZN) was in the red so far this year. Constellation Energy (CEG), as well as software companies Oracle (ORCL) and Applovin (APP)—one-time poster children of the AI rally—are also down since the start of the year.
Huang on Monday reportedly told analysts that AI-specific storage and memory are “a completely unserved market today,” but that the industry “will likely be the largest storage market in the world.”
Huge demand for memory and data storage devices vastly outstripped supply last year, causing prices to skyrocket. Memory chip maker Micron’s (MU) gross margins expanded to 56% in the most recent quarter from 38% a year earlier.
Sandisk, Western Digital, and Seagate are among the companies expected to benefit from the huge amounts of data involved in AI, which is first trained on vast troves of data and then generates even more during inferencing. International Data Corporation estimates the amount of data being stored worldwide will double between 2024 and 2029, according to a recent Bank of America report.
“This active data stockpile is likely to continue growing as organizations retain more information for AI training, analytics, and compliance,” according to BofA’s analysts, who expect 2026 to be a banner year for AI inferencing as enterprises deploy AI to increase productivity, cut costs, and generate new revenue.
