Shares of Sandisk (NASDAQ: SNDK) were moving higher today after the maker of flash memory products gained in sympathy with memory chip leader Micron (NASDAQ: MU), which bounced back after a bullish note from Cantor Fitzgerald this morning.
That set off something of a relief rally in the memory sector, which had been pounded in recent days after Alphabet revealed its new TurboQuant algorithm that can purportedly cut storage requirements, threatening memory chipmakers.
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As a result of the broader upswing in the stock market and the Cantor note, Sandisk was up 11.3% as of 12:55 p.m. ET, and Micron had gained 11.4%.
Cantor Fitzgerald’s endorsement of Micron seemed to be the main reason for the pop in Sandisk today. The research firm called Micron a top pick and reiterated its price target at $700 after meeting with the management team.
Cantor also observed that Micron has an advantage over its Korean competitors due to the shock from the Iran war, which is creating an energy shortage and driving up prices in South Korea.
That could also favor Sandisk, though its manufacturing mostly takes place in Asian markets that rely on oil and natural gas coming out of the Strait of Hormuz.
Additionally, Cantor argued that the TurboQuant compression algorithm wasn’t a threat to Micron because of Jevons paradox, meaning more efficient use of a product drives increased demand and consumption of that product. That also figures to benefit Sandisk, if it’s true.
Sandisk stock has skyrocketed in recent months due to the spike in memory prices, and the stock is basically at the mercy of the memory market at this point, which is notoriously volatile and cyclical. If prices remain elevated and demand continues to exceed supply, Sandisk is likely to move higher.
At this point, Sandisk and its memory peers are largely playing an expectations game, and bullish commentary like Cantor’s will push these stocks higher as well.
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