The Era of AI Inference: The Explosive Growth of NAND. SanDisk (SNDK.US) Investor Day May Reveal a New Growth Curve! The Storage Bull Market Awaits the Next Fundamental Catalyst.

The SanDisk Investor Day on August 13 is likely to serve as a significant catalyst for the storage chip sector and even for the global AI computing power supply chain. The US NAND storage chip giant SanDisk (SNDK.US) previously reported second-quarter earnings that exceeded expectations across the board. However, its revenue and profit outlook for the next quarter fell slightly below the markets escalating expectations. This highlights the continuous expansion of enterprise-level NAND storage chip demand for AI data centers. Yet, the market is becoming increasingly harsh regarding SanDisk's future growth projections, where any slight miss could trigger drastic stock price fluctuations. Any signals released by the management during the SanDisk Investor Day regarding growth prospects or the demand and technology evolution of NAND could serve as a fundamental confirmer for continued rebounds in global storage stocks. During last week's earnings call, SanDisk's management provided an outlook that did not significantly exceed expectations, and they guided that gross margins would trend towards a plateau, maintaining around 83%85%, corresponding to an annual earnings per share (EPS) of about $180. If calculated at a 10x price-to-earnings ratio, it would correspond to a stock price of around $1,800. Currently, SanDisk's stock price hovers around $1,350. Therefore, fundamentally speaking, the market does not believe that a gross margin of over 80% is sustainable and is pricing in a lower future EPS. At least the core performance data for the next two quarters exceeding expectations has been implicitly accepted by the market. The focus has now shifted to: once NAND flash prices stop rising and supply gradually catches up with demand, can the management release signals regarding what level normal gross margins will be at and provide substantial insights into growth prospects for 2027? Or will they disclose any technological evolution signals regarding one of the largest structural demand increments in the next round of NANDHBF? More specifically, investors will be closely watching the signal: whether the companys new business model contracts based on the LTA (Long-Term NAND Supply Agreement) can continuously support high gross margins and the currently strong revenue structure of the enterprise-level data center NAND business. Only at that time will investors believe that funds will once again conduct substantive revaluation of this stock. Until that signal appears, any weekly uptick may merely be volatility draped in the guise of an uptrend. If the fundamentals do not change, some analysts do not believe that stock prices can return to historical highs. Kioxia, SanDisk, SK Hynix, and Samsung clearly define High Bandwidth Flash (HBF) as a new form of NAND aimed at addressing the AI memory wall, targeting to provide greater capacity in AI inference and claiming that HBF can achieve nearly infinite capacity HBM-like comprehensive transmission performance in relevant inference tests while significantly increasing usable memory capacity. SanDisk and SK Hynix have released the first OCP technical specification, attempting to place high-capacity, durable NAND closer to AI accelerators, alleviating the memory wall during the inference stage while enhancing bandwidth and reducing overall costs for Token services; it is not a short-term substitute for HBM but may create a new near-computation storage layer between HBM and traditional SSDs. The NAND sector is entering a critical validation of the "inference era"! Will the SanDisk Investor Day face HBF commercialization head-on? The SanDisk Investor Day is indeed likely to become a key catalyst for global storage chip transactions and even AI computing infrastructure theme transactions, but what the market truly needs to hear is not how much more can prices rise next season but three key things: normalizing NAND gross margins, the profit stability of long-term supply agreements (LTA/NBM), and the timeline for HBF (High Bandwidth Flash) transitioning from technical standards to commercialization. On August 3, SanDisk just released its first OCP HBF technical specification in collaboration with SK Hynix, with leading AI technology companies like Google (Alphabet Inc. Class C) and Tenstorrent participating in validation, clearly positioning HBF as a new memory layer with high capacity and high bandwidth in AI inference systems close to xPU; on August 12, it further collaborated with Kioxia to release a new generation of 2Tb QLC 3D NAND for AI infrastructure. HBF (High Bandwidth Flash) is likely to become one of the largest structural demand increments in the next round of NANDsome analysts even emphasize that the latest HBF technology plans and outlook mean NAND is trying to replicate the historical moment of HBM. SanDisk and SK Hynix just released the first open HBF technical specification in August: it is based on 3D NAND but no longer limited to remote SSD storage; instead, it uses advanced packaging and UCIe interfaces to get closer to CPU/GPU/xPU, achieving a maximum single package capacity of 512GB and bandwidth of 0.43.0TB/s. SanDisk plans to provide the first HBF samples in the second half of 2026, with the first AI inference devices equipped with HBF expected to enter the sample stage in early 2027. Thus, it is highly likely that during the Investor Day, management will further explain the HBF roadmap, mass production/customer onboarding pace, eSSD and QLC expansion, and how the new business model will maintain high gross margins. However, investors should be cautious that before formal disclosures during the meeting, the HBF technology route and significant commercialization announcements should not be viewed as certain disclosure events. SanDisk itself reported total revenues of $8.97 billion in FYQ4 (fourth fiscal quarter), with a significant quarter-over-quarter increase of 51%, of which about two-thirds of the growth came from pricing, while noting that total revenues related to its data center business grew significantly by about 400% year-on-year. If SanDisk management can upgrade high ASP to long-term contracts + structural incremental demand in AI storage + new product cycles for HBF, it could further boost SanDisk and even global storage chip stocks' recent strong uptrend. More importantly, the current AI storage bull market is now backed by hard evidence across companies and media, not just the prosperity of SanDisk alone. Samsung has clearly predicted that server DRAM, eSSD, and HBM demand will further accelerate in the second half of 2026, even as mobile/PC demand may slow down, the industry will still remain in short supply; SK Hynix stated that Agentic AI is expanding the entire DRAM/NAND storage chip demand base, with significant price increases for both NAND and DRAM in the second quarter, and continuing to shift NAND capacity towards 321-layer, high-capacity, and high-performance products. Western Digital Corporations fourth-quarter revenues surged by 44% year-on-year to $3.75 billion, and Seagates total revenues increased by 48% year-on-year to $3.63 billion with free cash flow of $1.1 billion. Both companies emphasized the substantial storage demand brought by AI cloud data centers. It is important to distinguish that Western Digital and Seagate are primarily validating HDD/Beijing Vastdata Technology storage (Mass-Capacity Storage) demand now, not directly proving NAND demand. Yet they all illustrate that the era of AI inference is creating a larger data lifecycletraining data, model checkpoints, RAG databases, logs, inference context, and long-term data retention will push demand from HBM all the way to DRAM, eSSD/NAND, and HDD. The two major storage giants, holding a 50% weight in the Korean stock market, have surged over 20% since the low on July 30, entering a technical bull market, highlighting that the AI infrastructure craze driving the HBM/DRAM/NAND storage supercycle is still in strong play. Morgan Stanleys shift from bearish to bullish validates that the storage supercycle is not yet over. For the bullish sentiment surrounding storage chip stocks, Morgan Stanley Senior Analyst Shawn Kim has transitioned from being a bear spokesperson to believing that the adjustment phase is nearing its end, which is an important market signal. However, a more accurate interpretation is not that he suddenly believes storage prices will always rise, but rather that he thinks the market has overtraded the decline in the second derivative of prices. According to reports, Shawn Kim believes that the most severe adjustments in storage chips in the short to medium term have ended, and current valuations provide tactical re-entry opportunities, raising SK Hynixs 2026 EPS again. Morgan Stanleys research report suggests that Q3 NAND contract prices are expected to rise significantly by 20% quarter-over-quarter against the backdrop of a high base from the previous quarter, and the industry is continuing to shift production capacity from the consumer end to eSSD. At the same time, Kim shifts the next stage of stock price DRIVE from simple ASP increases to long-term supply agreements (LTA) + free cash flow growth trajectory (FCF) + strong capital returns. This analyst's latest perspective also precisely reveals that the next stage of NAND investment logic is shifting from NAND price increase Beta to AI inference demand + eSSD content volume enhancement + long-term contract lock-in + HBF new architecture Alpha. From the perspective of AI system engineering, the biggest difference in this round of storage supercycle is that HBM/server DRAM/enterprise-grade SSD are upgrading from being ordinary cyclical products to becoming the physical bottlenecks of AI computing systems. Elon Musk rarely commented on the storage market during SpaceXs Q2 2026 earnings call, stating that storage supply grows by about 20% annually, but demand growth is as high as 200%, or even higher, creating a severe imbalance between supply and demand that naturally leads to price increases as a basic economic principle. SK Hynix CEO Kwon Oh-chul previously noted in a July conference call that 2027 could be the tightest supply year in the history of the global storage industry, and the state where customer demand exceeds the company's supply capacity may persist until after 2030.