SanDisk stock bounced sharply Wednesday morning after getting caught in Tuesday’s AI-linked selloff. The recovery came on the back of strong Seagate earnings that calmed nerves about the health of the data storage market.
SanDisk rose 7.8% to $1,080 in premarket trading. Western Digital climbed 10.5% to $432, and Micron added 4.7% to $528.12.
Tuesday’s drop came after The Wall Street Journal reported that OpenAI had missed key growth targets. That spooked investors across the AI supply chain, pulling down memory and storage names in one session.
Seagate changed the mood fast. The hard-drive maker beat on both earnings and sales, then issued guidance above what Wall Street had expected for its fiscal fourth quarter. Seagate stock surged 17.8% to $682 in premarket trading after slipping 2.8% the day before.
For investors in SanDisk and its peers, Seagate’s results were a clear signal: whatever OpenAI’s internal numbers look like, the broader demand for AI infrastructure storage isn’t slowing down.
Memory stocks have been among the market’s biggest winners this year. SanDisk had gained 322% through Tuesday’s close. Seagate was up 110%, Western Digital 127%, and Micron 77%.
Analysts aren’t calling the top yet. Melius Research’s Ben Reitzes initiated coverage of both Micron and SanDisk at Buy on Monday. He told investors the rally still has room to run, calling memory “existential” for the AI boom and saying demand is likely to compound “exponentially.”
D.A. Davidson also initiated Micron at Buy Wednesday, slapping on a $1,000 price target.
All eyes now turn to SanDisk’s fiscal third-quarter results, due April 30. The company set the bar high with its last report.
In fiscal Q2, SanDisk posted revenue of $3.03 billion, up 31% quarter-over-quarter and 61% year-over-year. GAAP net income hit $803 million, or $5.15 per diluted share.
Its Q3 guidance was the part that really got attention. SanDisk forecast revenue of $4.4 billion to $4.8 billion and non-GAAP diluted EPS of $12 to $14. It also guided for gross margins of 65% to 67%, well above the 51.1% it posted in Q2.
The datacenter side of SanDisk’s business is becoming a bigger part of the story. Datacenter revenue rose 64% sequentially in Q2, reaching $440 million, up from $269 million the prior quarter.
AI infrastructure builders, semi-custom customers, and large-scale tech companies deploying AI were all cited as drivers.
Investors watching Thursday’s call will be focused on NAND pricing trends, whether datacenter momentum continued into Q3, and what management says about the outlook for the rest of the year.
The earnings call is set for 1:30 p.m. Pacific Time on April 30.
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