Core Insights - The S&P 500 has increased by 17% in 2025, nearing its all-time high, primarily driven by strong economic growth and corporate earnings, with a notable contribution from storage-focused chipmakers rather than traditional AI leaders [1][2] Company Performance - Sandisk has experienced a remarkable surge of 534% year-to-date since its February spinoff from Western Digital, becoming a leading player in the NAND flash memory market [3][6] - Western Digital has also performed well, with a 275% increase, focusing on high-capacity HDDs for AI storage, and reporting a 30% revenue growth in fiscal Q4 [7] Market Dynamics - The demand for massive data storage in cloud and AI infrastructure has significantly boosted the performance of Sandisk and Western Digital, distinguishing them from typical AI stocks [2][4] - Sandisk's revenue rose by 10% to $7.36 billion in fiscal 2025, driven by increased storage needs from major AI hyperscalers like Amazon AWS and Google Cloud [4][6] Pricing and Margins - NAND prices have surged by 50% due to supply constraints, resulting in Sandisk achieving margins of 35%, well above the industry average of 25% [5] - Sandisk's vertical integration from wafer fabrication to SSD packaging has led to an impressive 188% adjusted earnings growth, attracting upgrades to "Strong Buy" status [6]
The 2 Chip Stocks Leading the S&P 500’s Boom in 2025 Are Not Who You Think