After a brutal wave of selling in the after-hours session that followed their earnings releases, US-listed memory chip stocks rapidly repaired sentiment and staged an epic short-squeeze rally. On Thursday, May 1, local time, SanDisk, Seagate Technology, and Micron Technology all closed at all-time highs, while Western Digital also breached its prior peak intraday, underscoring the market's firm conviction in the core thesis of surging AI-driven storage demand.
Friday's closing figures showed SanDisk shares skyrocketing 8.25% in a single session, making it the clear sector leader. Seagate Technology followed closely with a 7.91% gain, while Micron Technology added 4.84%. Western Digital, after surging early in the session, pulled back to end with a slight decline of 0.69%, but still touched a fresh all-time high during trading. Just one day earlier, both storage giants had reported fiscal third-quarter results that comprehensively exceeded Wall Street expectations, only to see their shares temporarily dive—Western Digital fell more than 8% and SanDisk dropped over 6%—sparking broad discussion that the positive news had already been priced in. A single trading session later, however, bulls returned with even greater force.
Blowout Earnings Initially Met With Selling, Followed by Rapid Buyback After Profit-Taking
The catalyst for this round of trading was the exceptionally strong fiscal third-quarter results from SanDisk and Western Digital.
SanDisk's numbers were nothing short of explosive. For the fiscal third quarter ended April 3, the company reported revenue of $5.95 billion, a staggering 251% surge year-over-year and a 96.69% sequential jump, far surpassing the analyst consensus of $4.72 billion. Net income reached $3.615 billion, up 350% sequentially, with adjusted earnings per share of $23.41, roughly 1.6 times the market expectation of $14.50. Western Digital also delivered strong results, posting fiscal third-quarter revenue of $3.337 billion, a 45.47% year-over-year increase that beat the $3.25 billion consensus estimate. Adjusted earnings per share came in at $2.72, markedly above the projected $2.39.
Yet the market's initial reaction in the April 30 after-hours session was aggressive selling. According to a Wall Street CN report, Michael Ashley Schulman, partner at Cerity Partners, explained at the time that "the guidance from both companies failed to provide the 'wow factor' needed to sustain the current momentum." This assessment came against the backdrop of Western Digital shares having surged roughly 900% over the past year, and SanDisk—which completed its spin-off and public listing in February 2025—having rocketed from $36 to roughly $1,063 after-hours, a gain of around 3,300%. In the face of such enormous gains, some capital opted to lock in profits on the confirmed news, even as results comprehensively beat expectations and next-quarter guidance came in well above analyst projections.
But the solidity of the fundamental thesis clearly extended beyond short-term trading sentiment. Just one trading day later, broader institutional money flooded back in. A concentrated wave of significant target-price increases from multiple top-tier Wall Street firms following the earnings provided the most direct catalyst for the V-shaped reversal.
Wall Street Firms Flip Bullish En Masse; Highest Target Price Reaches $2,000
After the earnings release, SanDisk was met with a flurry of rating and target-price upgrades from institutions. Susquehanna delivered the most aggressive revision, doubling its target price for SanDisk from $1,000 per share to $2,000 per share. Citigroup hiked its target from $980 to $1,300 per share, Bank of America Global Research raised its target from $1,080 to $1,550 per share, Mizuho lifted its target from $1,000 to $1,220 per share, Barclays raised its target from $750 to $1,200 per share, and Méliuz Research moved from $1,350 to $1,500 per share.
The confidence behind these collective, substantial upward revisions stemmed from the explosive growth of SanDisk's data center business. Financials revealed that SanDisk's fiscal third-quarter data center revenue reached $1.467 billion, surging 645% year-over-year and 233% sequentially, becoming the core engine driving overall revenue growth. SanDisk CEO David Goeckeler stated unequivocally in the press release: "This quarter marks a fundamental inflection point for SanDisk—our technology leadership has allowed us to intentionally shift our product portfolio towards the highest-value end market, led by the data center." The company also issued fourth-quarter guidance well above expectations, forecasting revenue of approximately $8 billion at the midpoint and adjusted earnings per share in the range of $30 to $33—both figures significantly exceeding even the most optimistic prior analyst estimates.
AI Capex Tsunami Fuels Storage Demand; Pricing Power Continues to Strengthen
The collective breakout in the memory sector is not mere stock speculation but is rooted in the massive narrative of artificial intelligence infrastructure buildout.
Western Digital CEO Irving Tan succinctly captured this demand logic in the earnings statement: "Virtually every AI workload—from training, inference, agentic AI to physical AI—generates data that needs persistent, cost-efficient storage on hard drives." This AI-driven data deluge is causing demand growth for storage products to consistently outpace supply, granting leading players like SanDisk and Western Digital rare pricing power. Bank of America analyst Wamsi Mohan had pointed out before the earnings that demand outstripping supply was creating "a favorable pricing environment."
Meanwhile, major U.S. technology corporations continue to ramp up AI investments. U.S. Bancorp Wealth Management Chief Investment Strategist Tom Hainlin noted that the $650 billion in annual AI spending by tech companies this year is not inherently negative, but investors will ultimately demand to see a return on that investment. The earnings explosion from memory chip makers—an indispensable link in the AI computing infrastructure chain—serves as tangible proof that AI spending is beginning to translate into substantive profits for upstream suppliers.
Record Highs for the Broader Market; Apple Earnings Add Fuel to the Fire
The euphoria in the storage sector also unfolded against a backdrop of extremely bullish broader market sentiment. On Friday, the S&P 500 and Nasdaq Composite rose 0.29% and 0.89%, respectively, both closing at record highs and notching their sixth consecutive weekly gain—the longest such streak since October 2024.
Strong earnings from Apple (AAPL) also injected a shot of adrenaline into tech stocks. Apple surged nearly 6% intraday on Friday and closed with a gain exceeding 3%. The company reported fiscal second-quarter earnings per share of $2.01 on revenue of $111.2 billion, both beating market expectations. iPhone revenue grew 20% for a second consecutive quarter, reaching $56.99 billion. Bank of America Global Research analyst Wamsi Mohan specifically highlighted expectations for a foldable iPhone, the upcoming Worldwide Developers Conference on June 8, and the unexpected improvement in the Mac business driven by demand from AI developers as key factors supporting a bullish outlook on Apple. Apple CEO Tim Cook disclosed on the earnings call that customer demand for the Mac Mini and Mac Studio, used as platforms for AI and agentic tools, had exceeded the company's own projections.
Broadly, this week marked the critical final stretch of earnings season, with companies representing more than four-fifths of the S&P 500's market capitalization releasing results. LSEG data showed analysts had revised their estimate for the index's first-quarter year-over-year earnings growth rate upwards to 27.8%, the highest since the fourth quarter of 2021. Of the 314 companies that had reported, 83% surpassed earnings expectations.
The share-price trajectories of storage giants like SanDisk and Western Digital vividly illustrate how, under elevated expectations, even exceptionally dazzling results can face near-term "sell-the-fact" pressure. Ultimately, however, once the market digests the profit-taking and the overhang clears, the grand narrative of AI infrastructure buildout and continuously rising earnings estimates still push stock prices to unprecedented heights. As long as data centers thirst for storage remains unquenched, the capital feast surrounding this sector is difficult to declare over.
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