U.S. semiconductor stocks suffered a broad sell-off on Tuesday, with industry leaders Nvidia and Advanced Micro Devices leading the decline and dragging down major tech benchmarks. However, memory chip makers Micron Technology Inc. (MU) and SanDisk Corp. (SNDK) bucked the trend to post sharp gains, emerging as the standout performers in an otherwise weak market.
SanDisk closed up 4.2% on the day, while Micron outperformed with a 5.8% advance. The gains stood in stark contrast to other storage players: Seagate Technology Holdings PLC slipped 0.7% and Western Digital Corp. — SanDisk’s former parent company — edged down 0.2%, highlighting the growing divergence within the sector.
SanDisk’s surge was driven by a glowing research report from Citi Research, which reaffirmed its Buy rating on the flash memory supplier and raised its price target to $2,025 from $1,300. The new target implies a 52% upside from SanDisk’s Monday closing price of $1,333.01.
Over the past 12 months, SanDisk’s shares have skyrocketed an astonishing 3,218%, fueled by explosive demand for its enterprise solid-state drives (eSSDs), which have become an indispensable building block for AI data center infrastructure.
“We remain constructive on a highly favorable supply-demand environment with clear indications of persistence with customer demand conversations through 2030,” wrote Citi analyst Asiya Merchant.
That optimistic outlook was reinforced by strong earnings last week from Japanese rival Kioxia Holdings Corp., which reported an approximately 85% quarter-over-quarter jump in revenue and guided for 75% sequential growth in the current period. The results handily beat Wall Street estimates, Citi noted.
Share buybacks are another key tailwind for SanDisk. The company announced a $6 billion share repurchase authorization last quarter, representing about 3% of its current market capitalization. Citi expects the buyback program to expand as the company’s free cash flow grows.
Citi estimates that every 1% reduction in share count will boost earnings per share by $2. Notably, share buybacks are not currently factored into its valuation model, suggesting the $2,025 price target may be conservative.
Wall Street analysts broadly agree with Citi’s bullish stance. Of the 26 firms polled by FactSet, 20 rate SanDisk a Buy and just 1 rates it a Sell. Citi is the fifth firm to assign a price target of $2,000 or higher.
Micron also staged an impressive intraday turnaround. The stock opened lower but quickly reversed course after Citigroup and Mizuho Securities both raised their price targets on the memory maker.
Citigroup nearly doubled its price target on Micron to $840 per share, implying a roughly 19% upside from the stock’s current price of $706. Mizuho lifted its target to $800 from $740, and its analysis provided deeper insight into the industry’s long-term fundamentals.
Mizuho forecasts that strong pricing for both DRAM and NAND flash memory will persist not just through the end of this year, but also into 2027, according to StreetInsider.com. The bank cited insatiable demand for high-bandwidth memory (HBM) and eSSDs as the primary driver of price increases, and added that the emergence of high-bandwidth flash (HBF) technology could further tighten NAND supply in 2027.
Adding to the bullish case is a looming labor strike at Samsung Electronics Co., which could curtail global memory chip supply and send prices soaring — a scenario that would disproportionately benefit competitors like Micron.
Investors are now looking ahead to Micron’s earnings report, scheduled for June 24. Analysts expect the company to deliver a 261% year-over-year increase in revenue to $33.6 billion, with earnings per share projected to surge tenfold to $19.02.
While the memory sector is currently enjoying unprecedented strength, concerns linger about the semiconductor industry’s inherent cyclicality, with investors wary that the current boom will eventually give way to a downturn. However, most analysts believe a correction is unlikely this year, and possibly not even next year, as the AI-driven demand surge shows no signs of abating.
