A single guidance report lifts the entire sector: behind SanDisk's 14% surge, AI computing power is becoming a "cash-generating asset"

After a brief pullback in the memory chip sector recently, the entire US stock market has been busy searching for new narratives—optical communications and Neocloud have emerged as candidates unearthed by capital during this period.

However, yesterday, the storage camp threw out a bombshell of its own: SanDisk released its long-term financial model at its 2026 Investor Day, outlining financial targets for fiscal years 2028 through 2030. The substance of this guidance is enough to make the entire sector reassess how storage stocks are priced.

1. Just How Game-Changing Is This Guidance?

First, look at two numbers.

Revenue side: annual growth of 15% to 19% over the next several years, sustained within this range for three consecutive years—not a one-year spike, but a stable trajectory baked into the long-term model.

Profit side: gross margin is expected to hold at approximately 80%. That means for every 100 yuan in revenue, 80 yuan stays at the gross profit level. For a storage industry known for cyclical volatility, this level of profitability is nothing short of extraordinary.

2. More Important Than the Numbers Is the Structure: NAND Is Being "De-Cyclicalized"

Beyond the numbers, what truly excites the market is the business model transformation SanDisk disclosed.

The company stated it has signed new business model (NBM) agreements with eight customers. The terms of these agreements are carefully designed: they include committed purchase volumes, binding contractual frameworks, minimum financial guarantees, and structured pricing mechanisms. The purpose is clear—to lock customer demand rhythms into the company's capacity planning, smoothing out the dramatic ups and downs traditionally associated with the storage industry.

The coverage scale is already substantial: existing NBM agreements cover roughly half of FY2027 bit shipments and about two-thirds of FY2028 bit shipments.

In other words, SanDisk is doing two things simultaneously: betting on long-term AI-driven storage demand growth on one hand, and using long-term contracts to gradually transform NAND—a cyclical business that previously "depended on the weather"—into one where both revenue and cash flow can be locked in advance. The latter's impact on the valuation framework is far more profound than any single quarter's revenue figure.

3. Sector-Wide Resonance: One Green Candle, Everyone Thanks SanDisk

The market's response was unambiguous. SanDisk closed up nearly 14%, lifting the entire memory chip sector in a strong rally: Micron gained 4%, and SK Hynix rose 7%.

It's fair to say the whole sector is thanking SanDisk for this guidance. And looking at a longer timeline, this scene carries another layer of meaning—the crash thesis for AI chip stocks previously put forward by the prominent bear Burry is now being dismantled by mounting evidence. From the resilience of older GPU contract renewal prices in Neocloud's earnings, to SanDisk's multi-year demand lockup, the "demand collapse" script envisioned by bears has yet to materialize.

4. Jensen Huang Adds Another Blow: A100 to Remain in Service Until 2029

Right on top of SanDisk's news, NVIDIA CEO Jensen Huang's latest remarks add another brick to this logic.

The company stated that a recently signed A100 contract extends through 2029. The A100 was launched in 2020—if this contract executes smoothly, it means this generation of older GPUs will still hold commercial rental value nearly a decade after their release.

The weight of this statement isn't in "2029" itself, but in the last three words. Rentable means older cards can keep generating rental income; durable overturns the bears' assumption of "scrapped within two to three years"; and financeable means financial institutions are willing to treat GPUs as collateral—when an asset can be priced by banks, that's when it truly becomes "assetized."

5. In Closing: AI Infrastructure Is Evolving from "Cash Incinerator" to "Cash-Generating Asset"

So, as SanDisk, Micron, and SK Hynix share prices have been recovering over the past week, the market is likely trading not just on long-term storage demand, but on a deeper transformation:

AI infrastructure is shifting from a "CapEx-burning" narrative of continuous spending to an asset class that is financeable, renewable, and capable of generating rolling cash flows. When GPUs can back loans, older cards can be renewed for rental income, and NAND shipments can be locked in via long-term contracts, the valuation anchor for this industry has quietly moved from "cyclical stock" toward "infrastructure-like asset."

Going forward, the key things to watch—beyond memory chip demand itself—are two more granular indicators: old-card renewal pricing and old-card utilization rates. If these two hold up, the favorable window for storage could be longer than what the market is currently pricing in.

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