The semiconductor and storage market appears to be in an AI-driven supercycle, with SanDisk (SNDK) and Western Digital (WDC) experiencing significant gains due to accelerating AI-driven demand.

1. Current Market Conditions and AI-Driven Supercycle

SanDisk (SNDK) saw its shares rise over 5% overnight, and is up 871% since its spin-off in early 2025, largely due to explosive demand for AI flash storage. Its BiCS8 technology, delivering high-capacity, power-efficient SSDs, is particularly suited for AI applications. SNDK closed at $409.24 on January 15, 2026, with a 52-week high of $423.35.

Western Digital (WDC) rose over 3% overnight, and is on a 5-day continuous rise, reaching a 52-week high of $230.48. It closed at $222.10 on January 15, 2026. WDC's growth is fueled by strong demand for storage solutions in AI data centers, with close to 90% of its revenue coming from the cloud segment.

The semiconductor industry as a whole is experiencing an AI-driven upcycle that is considered resilient and likely to continue.

AI buildouts are creating a supply crunch in memory and storage, leading to increased contract prices for NAND Flash and DRAM.

Nvidia CEO Jensen Huang stated that the memory storage market is "underserved" and that the "AI-driven supercycle" will likely be sustained and extended by new technologies, including Nvidia's new storage platform optimized for agentic AI inference.

2. Storage Pricing Power and Bernstein's $580 Target for SanDisk

Reports indicate that flash memory prices increased by 20% to 60% in November 2025, with some categories more than doubling since February 2025. Contract prices for NAND Flash are expected to increase by 33-38%, and DRAM pricing is anticipated to go "significantly higher".

Counterpoint Research reported that the storage market has entered a "super bull market" phase, with prices expected to rise by 40-50% in Q4 2025, another 40-50% in Q1 2026, and approximately 20% in Q2 2026.

This strong pricing power is due to constrained supply and booming demand, with some analysts noting that suppliers failed to expand supply and even cut back production. Western Digital is not planning to add more production capacity for now, which is expected to further boost prices.

Bernstein raising SanDisk's target price to $580, citing an "unprecedented storage supercycle," suggests that the market may indeed be underestimating the full extent of storage pricing power and the duration of this supercycle. Industry leaders and analysts consistently point to a prolonged period of high demand and tight supply for memory and storage.

Conclusion

The current market conditions strongly indicate that we are in the early to mid-stages of an AI-driven supercycle for semiconductors and storage. The surging demand for AI infrastructure, combined with disciplined capacity management and supply constraints, has led to significant price increases and strong performance for companies like SanDisk and Western Digital. Bernstein's aggressive price target for SanDisk, alongside widespread reports of sustained demand and rising prices, suggests that the market might be underestimating the long-term implications of this supercycle and the resulting storage pricing power. While the memory market is cyclical, the unique and massive scale of AI-driven demand points to a sustained period of high profitability for memory and storage players for "at least a year or more".