Over the weekend, a piece of news went viral in the AI community.

Flash memory giant SanDisk Corporation(SNDK.US) announced a significant 50% increase in NAND flash contract prices in November. This marks at least the third price hike by SanDisk this year. After a 10% price increase across all products in April, SanDisk implemented another 10% increase in early September for all channels and consumer products, setting off a wave of price hikes followed by industry leaders like Micron Technology, Inc.(MU.US).

The price hike has caused a stir across the entire storage supply chain, prompting module manufacturers like Transcend, Innodisk, and Apacer to halt shipments and reassess their pricing. Transcend, for instance, suspended quotations and deliveries starting November 7, citing expectations of a continued favorable market trend, implying further potential price increases.

Regarding the anticipated rise in storage prices, SMI's CEO, K.S. Chia, noted in a recent interview that the global memory industry is facing a structural, long-term severe shortage due to the rapid expansion of AI applications.

In fact, recent trends in storage-related stocks show that these companies are reaching new highs despite market corrections. SanDisk Corporation(SNDK.US) has surged over 600% this year, while Western Digital Corporation(WDC.US), Seagate Technology PLC(STX.US), and Micron Technology, Inc.(MU.US) have more than doubled in value.

As the storage industry undergoes a supercycle with strong demand and limited supply, valuations of storage-related stocks are being recalibrated. We have identified key companies within the industry chain that investors should watch:

In the U.S. stock market, key players to watch include Micron Technology, Inc.(MU.US), one of the top three global DRAM suppliers and the second-largest HBM supplier, as well as the fourth-largest in the global NAND market. SanDisk Corporation(SNDK.US) ranks fifth in the global NAND market. The two major hard drive manufacturers are Western Digital Corporation(WDC.US) and Seagate Technology PLC(STX.US).

Other significant companies include Silicon Motion Technology Corporation Sponsored ADR(SIMO.US), a leader in NAND flash memory controller solutions; Rambus Inc.(RMBS.US), a U.S. memory IP company; Marvell Technology Group Ltd.(MRVL.US), a leader in global memory storage technology; Lam Research Corporation(LRCX.US), a storage packaging company; Applied Materials, Inc.(AMAT.US), specializing in thin film deposition systems for memory chip processes; NetApp, Inc.(NTAP.US), a leader in enterprise memory storage technology; and Pure Storage, Inc. Class A(PSTG.US), a global leader in memory storage technology.

Goldman Sachs recently highlighted that SanDisk's Q3 performance exceeded expectations, boosting market confidence. The firm raised SanDisk's target price to $280, citing a NAND flash market supply shortage expected to last until 2026, granting manufacturers strong pricing power and resulting in soaring profit margins. They increased the 2025-2027 EPS forecast by an average of 79%, noting that AI server demand is a key factor in the supply-demand imbalance. The market has yet to fully realize the profit potential of this supercycle.

Bank of America believes rapid growth in data center demand is significantly driving NAND flash pricing, with high-margin enterprise SSD products being the main profit driver. They revised SanDisk's FY2026 EPS up by 15.4% to $8 and raised the target price from $125 to $230, maintaining a buy rating. BofA analysts suggest that under the AI-driven storage supercycle, the price-to-book valuation multiple for this NAND supplier should be re-evaluated to 3-4 times.

For Micron Technology, Inc.(MU.US), their financial report shows $10 billion in revenue for FY2025 from HBM, high-capacity DIMMs, and server LP DRAM, a fivefold increase from FY2024. In FYQ4 alone, HBM product revenue nearly reached $2 billion.

Citi analyst Christopher Danely recently raised Micron's target price to $275, predicting a 25% increase in DRAM prices in Q4 compared to Q3, the highest quarterly rise since the 1990s.

Additionally, Morgan Stanley analysts noted that data is the "crude oil driving AI," and hard disk drive manufacturers will significantly benefit. They stated: "Given the cyclical nature of the HDD industry, the market is overlooking a key point: with long-term growth momentum and structural margin improvements, Western Digital Corporation(WDC.US) and Seagate Technology PLC(STX.US) valuations will continue to break historical levels."

Overall, the storage industry is entering a "boom cycle." However, Minsheng Securities cautions about related risks:

1. The cycle is driven by AI; if CSP capital expenditures fall short of expectations, it could negatively impact the storage industry and cycle recovery.

2. Current AI inference focuses on KV Cache processing; any technological shifts could alter storage tiering and demand.

3. If the development of Logic die separation manufacturing falls short, it could affect the mass production pace of 4F2 DRAM, impacting FAB and DRAM supply.