SanDisk Shares Surge on Bullish Morgan Stanley Memory Chip Forecast

SanDisk (SNDK) stock surged 7.4% in pre-open trading Tuesday after a Morgan Stanley analyst published a research note calling the recent downturn in memory stocks a compelling entry point for investors.

The Analyst's Call

In a note to clients, Morgan Stanley's Joseph Moore cited "persistently intensifying data center memory shortages" as a key driver for the sector. The firm forecast that memory prices could climb by at least 25% on a like-for-like basis from the second quarter to the third quarter of 2026.

Moore argued that while consumer, PC, and smartphone markets have shown mixed signals, the data center segment remains the sole, powerful demand driver. According to the note, Morgan Stanley's own channel checks with purchasing contacts found no signs of the supply shortage easing. The firm stated it is "actively buying on weakness" in the sector.

Sector-Wide Rally

The bullish sentiment lifted the entire U.S. memory chip sector in pre-market trading on July 21. The move was not isolated to SanDisk, with other major players also posting significant gains:

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• SK Hynix: up over 6%
• Western Digital (WDC), Micron Technology (MU), and Seagate Technology (STX): each up over 5%
• Rambus (RMBS): up 4%

The rally was supported by a positive broader market, with the NASDAQ Composite gaining 1.3% in early trading.

Context and Outlook

The analyst upgrade served as an immediate catalyst for a sector that had experienced a steep, multi-week correction. SanDisk, for instance, was trading well below its 52-week high of $2,354.39, according to Investing.com data.

The long-term supply outlook reinforces the bullish thesis. Comments from SK Hynix leadership, cited by the source, projected that 2027 could be the "worst year in the memory industry’s history from a supply perspective." This suggests that NAND flash producers like SanDisk are well-positioned to benefit from a prolonged supply-demand imbalance. Investors will be watching SanDisk's next quarterly earnings report, due on August 5, for further updates.