Microsoft's $190B CapEx Boosts SanDisk Amid Market Volatility
SanDisk (SNDK) has seen a significant rebound, with its stock up 23% at the time of writing and over 2,800% in the past year. This surge follows strong Q1 earnings reporting $5.95 billion in revenue—up 97% sequentially—and driven by enterprise SSD demand. Microsoft's projected capital expenditures for FY2026 include a substantial $190 billion investment, with $25 billion allocated to memory and storage, directly benefiting SanDisk. However, the market remains volatile due to competition from Chinese rivals like Yangtze Memory Technologies (YMTC), which has grown its NAND flash share significantly. YMTC's Q1 revenue surged 445% to $2.6 billion, posing a challenge for SanDisk’s pricing power and profit margins. Meanwhile, OpenAI reduced the price of GPT-5.6 Luna by 80%, potentially increasing demand for cheaper chips rather than premium ones like those sold by SanDisk. This shift could pressure SanDisk's profitability despite its recent gains.