For years, memory and storage companies sat on the quiet side of the tech market. They were steady but rarely exciting, and they often moved in sharp cycles. However, the rise of AI is now changing that view in a clear way, with SanDisk (SNDK) a clear example, up 1015% since last August.
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As companies race to build AI systems, demand for memory chips has surged. These chips store and move data for AI models, which need huge volumes of information to work well. As a result, memory has become one of the tightest parts of the AI supply chain. This shift has pushed memory stocks sharply higher, even as some large tech stocks have slowed.
We’ve already mentioned SanDisk. But Micron Technology (MU), Western Digital (WDC), and SK Hynix have also risen about three times over the same period. These gains stand out during a time when many megacap tech stocks have traded sideways.
AI Demand Meets Tight Supply
The main driver is simple. AI systems need more memory than older software, and the supply is not growing fast enough.
Nvidia chief executive Jensen Huang recently said that “holding the working memory of the world’s AIs” could become “the largest storage market in the world.” That view has drawn new focus to companies that make memory and storage chips.
Micron Technology, SK Hynix, and Samsung Electronics (SSNLF) are the main suppliers of fast memory used with Nvidia chips. These chips help feed data into AI processors during training and daily use. As AI models grow larger, the data flow keeps rising.
Rene Haas, chief executive of Arm Holdings (ARM), described the trend clearly when he said the use of high-speed memory in AI has “just exploded” and called demand an “insatiable need.”
At the same time, supply remains tight. Memory makers have seen painful boom and bust cycles in the past, so they are slow to add new factories. Building new plants also costs billions of dollars and takes years. As a result, output is not keeping pace with AI demand.
Some analysts now expect shortages to last until at least 2028.
Investors Look Beyond Big Tech
Meanwhile, the wider AI trade is changing shape. Nvidia remains about 11% below its peak from October. Among large data center builders, only Alphabet (GOOGL) has reached new highs since November.
This has pushed investors to search for new areas tied to AI growth. Memory and storage have become a clear target.
As Arun Sai of Pictet Asset Management said, the AI story has shifted toward memory as the main limit on future spending. He added that the market is now more selective and focused on clear winners.
Hedge funds also moved early. DE Shaw increased holdings in SanDisk, Micron Technology, Seagate Technology (STX), and Western Digital last year. Those positions would be worth about $3.9 billion more today. Arrowstreet and Renaissance Technologies also posted large gains from similar bets.
In short, AI is no longer just about processors. Memory has moved into a central role, and markets are adjusting fast.
Using TipRanks’ Comparison Tool, we’ve assembled all the tickers mentioned in the piece to gain an in-depth view of each stock and the broader memory chip industry.
