AI Capital Spending Remains Strong: Micron, SanDisk, and Super Micro Surge

The ongoing AI infrastructure investment boom is fueling momentum in memory, storage, and AI server stocks. Micron Technology (MU-US), SanDisk (SNDK-US), and Super Micro Computer (SMCI-US) all surged on Thursday (13th), rising approximately 4.2%, 13.7%, and over 8% respectively, reflecting market confidence that corporate capital spending on AI data centers will remain strong. The S&P 500 also rose 0.65%, closing at 7,798.99—a new all-time high—highlighting AI-related investments as a key driver of the U.S. stock market.

SanDisk saw the strongest gains, with its stock surging over 15% intraday, primarily due to the company unveiling aggressive long-term financial targets during its investor day, alleviating market concerns about a potential slowdown in memory demand. SanDisk forecasts mid-to-high single-digit annual revenue growth for fiscal years 2028 to 2030, with an adjusted gross margin of around 80%, adjusted operating margin of about 75%, and adjusted free cash flow margin approaching 50%.

SanDisk stated that its multi-year New Business Model (NBM) agreements will enhance revenue and capacity predictability. These agreements are expected to cover about half of its bit capacity in fiscal 2027 and rise to roughly two-thirds in fiscal 2028. Eight customers have already signed such multi-year contracts. The market views these long-term agreements as a way for SanDisk to mitigate the traditional cyclical risks of the memory industry amid rising AI data center storage demand.

SanDisk also expressed optimism about the development of High-Bandwidth Flash (HBF) memory technology, with customer samples expected in 2027. As AI models grow larger, data centers require not only more powerful GPUs and CPUs but also high-bandwidth memory, DRAM, and high-speed storage, significantly improving the supply-demand dynamics in the memory sector.

SanDisk’s stock has surged year-to-date, and Thursday’s investor day news further boosted sentiment, lifting other memory and storage stocks. Micron rose over 4%, and Western Digital (WDC-US) also gained, indicating that the market sees SanDisk’s long-term outlook as a key signal for the broader memory and storage industry.

Micron is also directly benefiting from AI data center expansion. The company reported third-quarter revenue of $41.46 billion for its fiscal year 2026—far exceeding the previous quarter’s $23.86 billion and last year’s $9.3 billion. GAAP net income reached $28.24 billion, with earnings per share at $24.67. Micron forecasts fourth-quarter revenue of around $50 billion (±$1 billion), a GAAP gross margin of approximately 86%, and EPS of about $30.73 (±$1).

Micron’s cloud memory business generated $13.769 billion in revenue during Q3, with strong year-on-year growth and an 83% gross margin. Core data center revenue reached $11.524 billion, with an 87% gross margin. The company noted that HBM4 has entered mass production and shipment, with qualification samples provided to multiple end customers. HBM4E is expected to enter mass production in 2027.

Micron continues to expand its AI memory and storage offerings. The company stated that AI workloads are expanding from model training to large-scale inference, increasing demand for both memory capacity and bandwidth across computing architectures. In June, Micron noted that AI context length is increasing by about 30 times annually, and server memory capacity has doubled over the past three years, underscoring rapidly rising memory demand from AI computing.

Super Micro’s rise was primarily driven by strong financial guidance and a surge in AI server orders. The company projected fiscal 2027 revenue between $65 billion and $72 billion—well above Wall Street’s average estimate of $52.5 billion. First-quarter revenue is expected to be $14.5–15.5 billion, with adjusted EPS of $1.01–1.10, also exceeding market expectations.

Super Micro reported that as of the end of its fiscal 2026 Q4, new orders exceeded $60 billion in a single quarter, entering fiscal 2027 with record backlog. Q4 revenue was $11.12 billion—slightly below the expected $11.55 billion—but nearly double the prior period. Gross margin improved significantly from an initially guided 8.2–8.4% to 17.5%.

The company attributed part of the revenue shortfall to customer delays in power, cooling, and network equipment deployment, pushing some revenue into future quarters. However, its customer base is expanding: in fiscal 2026, nine customers each contributed over $1 billion in revenue, up from four the prior year, indicating AI data center demand is broadening beyond a few large clients.

Super Micro plays a different role in the AI supply chain compared to Micron and SanDisk. While the latter two supply memory and storage components, Super Micro integrates GPUs, CPUs, memory, networking, cooling, and power into complete server and rack systems. As cloud providers and tech giants continue expanding AI compute capacity, demand for full AI server and rack systems will rise accordingly.

Recent earnings reports continue to validate strong AI infrastructure demand. Cloud AI providers CoreWeave (CRWV-US) and Nebius (NBIS-US) both reported robust demand for AI compute capacity, and Super Micro’s massive orders further confirm that hyperscalers and emerging AI cloud players are still investing heavily in data center expansion. This has led the market to reassess earlier concerns about a potential cooling in AI capital spending.

The AI infrastructure boom extends beyond servers and memory. Dell Technologies (DELL-US) rose about 3% on Thursday, with its year-to-date stock gain reaching 285%—significantly outpacing Micron’s 219% rise. The market sees AI servers, enterprise computing, and data center infrastructure as key growth drivers for Dell.

Overall, AI chip and infrastructure stocks have regained market momentum. On Thursday, semiconductor indices were lifted by AI demand, and sentiment toward AI server chip demand remains positive. Analysts believe both AI compute and memory demand exceed prior expectations, giving related companies stronger pricing power.

However, market expectations for the three companies differ. Micron and SanDisk benefit from improved memory and storage supply-demand balance, while Super Micro faces challenges including AI server market competition, supply chain management, and margin volatility. Despite record order volumes, Super Micro’s Q4 revenue missed expectations, showing that strong AI demand doesn’t guarantee immediate revenue conversion.

Additionally, memory stocks have already seen substantial gains, making valuation and industry cyclicality key risks for investors. SanDisk’s stock jumped after its long-term targets were announced, showing the market is willing to assign higher valuations for long-term profitability driven by AI demand. However, if AI data center capital spending slows in the future, high-valuation memory and server stocks could face significant volatility.

Overall, the simultaneous rise of Micron, SanDisk, and Super Micro on Thursday underscores that the AI investment cycle remains strong. From Micron’s HBM4 and data center memory demand, SanDisk’s multi-year storage contracts, to Super Micro’s $60+ billion in new orders, capital spending on AI data centers—from chips and memory to full server systems—continues to expand. As major cloud providers keep investing in AI compute, market focus is shifting from whether AI demand exists to how long this capex cycle will last and which suppliers can truly convert demand into profits.