Author: BIT Securities
After a recent pullback in the storage chip sector, the entire U.S. stock market has been busy finding new narratives—optical communication and Neocloud have been the candidates unearthed by funds during this time.
However, yesterday, the storage camp threw out a heavy bombshell: SanDisk announced its long-term financial model at its 2026 Investor Day, giving financial targets for the fiscal years 2028 to 2030 all at once. The substance of this guidance is enough to prompt the entire sector to reassess the pricing of storage stocks.
1. How explosive is this guidance?
First, let’s look at two numbers.
Revenue side: An annual growth of 15% to 19% over the next few years, maintaining this range for three consecutive years—this is not a one-time pulse for a specific year, but a stable slope written into a long-term model.
Profit side: Gross margin is expected to remain at about 80%. This means that out of every 100 dollars in revenue, 80 dollars can be retained at the gross profit level. Given the periodic fluctuations characteristic of the storage industry, this profit margin level is indeed outrageous.
2. More important than the numbers is the structure: NAND is being "de-cycled"
Beyond the numbers, what truly excites the market is the change in the business model disclosed by SanDisk.
The company stated that it has currently signed new business model (NBM) agreements with eight customers. The terms of these agreements are very sophisticated: they include commitments to purchase volumes, binding contractual frameworks, minimum financial guarantees, and structured pricing mechanisms. The purpose is clear—aligning customer demand rhythms with the company's capacity planning, minimizing the wild ups and downs traditionally seen in the storage industry.
The coverage scale is already quite considerable: the existing NBM agreements cover about half of FY2027's bit shipments and about two-thirds of FY2028's bit shipments.
In other words, what SanDisk is actually doing is two-fold: one side is betting on the long-term growth of storage demand driven by AI, while the other side is gradually transforming NAND, a cyclical business dependent on external factors, into a business where revenue and cash flow can be locked in advance through long contracts. The latter’s impact on the valuation system is far more profound than just a single quarter’s revenue figures.
3. Sector Resonance: One bullish line, everyone thanks SanDisk
The market’s response has been unequivocal. SanDisk's shares surged nearly 14%, leading the entire storage chip sector to a strong rally: Micron's shares rose 4%, and SK Hynix's shares rose 7%.
It can be said that the entire sector is thanking this guidance. And if we extend the timeline, this scene has another layer of meaning—previously, the major short seller Burry’s collapse logic regarding the AI chip sector is now being increasingly undermined by more evidence. From the solid renewal prices in Neocloud’s earnings report to SanDisk's multi-year demand locks, the bearish narrative of "demand collapse" that the shorts had pre-set has yet to materialize.
4. Jensen Huang adds a twist: A100 to be in service until 2029
Apart from SanDisk, NVIDIA CEO Jensen Huang's recent statement has added another layer to this logic.
The company announced that a recently signed A100 contract will last until 2029. The A100 was launched in 2020, and if this contract is successfully executed, it means that this batch of older generation GPUs will still have commercial rental value nearly a decade after their launch.
The weight of this statement lies not in "2029" itself, but in the last three words. Rentable means that old cards can continue to generate rental income; durable refutes the shorts' assumption of "scrapping in two or three years"; and financeable means financial institutions are willing to accept GPUs as collateral—an asset can only be truly "capitalized" when banks are willing to price it.
5. In conclusion: AI infrastructure is evolving from a "money-consuming beast" to a "egg-laying asset"
Therefore, the continuous rise in stock prices for SanDisk, Micron, and SK Hynix over the past week is likely signaling not only long-term demand for storage but also a deeper transformation:
AI infrastructure is transforming from a narrative of "burning CapEx" into a category of assets that can be financed, leased, and generate rolling cash flows. When GPUs can be used as loan collateral, old cards can renew leases for income, and NAND can lock shipments with long contracts, the industry’s valuation anchor has quietly shifted from "cyclical stocks" to "infrastructure-like assets".
The most worth watching next, aside from the demand for storage chips itself, are two more specific indicators: the renewal rental prices of old cards and the utilization rates of old cards. If these two do not drop, the time window for benefiting from storage may be longer than the market's current pricing suggests.
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