Micron's AI Memory Boom Faces Test as New Capacity Looms

Sandisk has locked in buyers for roughly half of its output this fiscal year and two-thirds of next year's, under long-term contracts that carry floor prices and minimum financial guarantees. At its August investor day, the company said it had signed ten of these agreements with eight customers, and management set fiscal 2028 through 2030 targets of mid-to-high-teens revenue growth and adjusted gross margins around 80%. In its most recent quarter, ended July 3, revenue rose 372% from a year earlier to $8.97 billion, with data-center sales now about a third of the total, and the company swung to a profit of nearly $7 billion from a loss a year earlier. Sandisk, spun off from Western Digital in February 2025, authorized an additional $14 billion buyback alongside its August results and entered the S&P 100 on September 21, after shares gained more than 640% this year, the best performance in the S&P 500. The shares closed Friday about 24% below their June record, and the next signal is the fiscal first-quarter report, expected in early November.

Rosenblatt initiated coverage of Sandisk with a Buy rating and a $2,400 price target, sending the NAND-flash and data-storage producer's shares up approximately 6.6% to $1,884.05. Rosenblatt analyst Kevin Cassidy sees NAND becoming a more important piece of the computing stack as AI workloads expand beyond processors into massive pools of high-speed storage. Sandisk's fiscal fourth-quarter revenue reached $8.97 billion, up 51% sequentially, as management leans into enterprise solid-state drives and its manufacturing partnership with Kioxia. At $1,884.05, the $2,400 target implies roughly 27.4% additional upside. Sandisk's GF Score sits at just 51 out of 100, with standout growth and financial strength offset by much weaker GF Value and momentum readings.

Arm Holdings shares rose 17% to $323 after CEO Rene Haas told CNBC that demand for the company's technology was off the charts and that he is increasingly convinced Arm can surpass its $2 billion revenue target for its developing AGI CPU business. That goal has moved quickly: Arm began in March with an initial target of $1 billion, raised it to $2 billion in May, and by September Haas said the pipeline was above that level. Nvidia's Vera CPU, Google's Axion, Amazon's Graviton5, and Microsoft's Azure Cobalt all use Arm-based computation, tying the company to the expanding trend of CPUs paired with AI accelerators. Haas also pointed to supply restrictions on wafers, substrates and testing capacity that could take years to work through, a problem that nonetheless shows demand is outstripping available capacity. The larger story is Arm's effort to move away from its usual licensing arrangement and capture more value from the chips themselves, and Monday's surge suggests investors are increasingly focused on that opportunity.