Sandisk surges as robust AI demand powers blowout forecast

Jan 30 (Reuters) - Sandisk shares rallied connected Friday, aft the information retention steadfast projected third-quarter nett and gross good supra analysts' estimates and ​extended a large proviso deal, powered by a surge successful AI-driven request ‌for information storage.

Its shares were past up 14.7% astatine $616.5, gathering connected their astir 160% leap successful January ‌that has made it 1 of the best-performing stocks connected the S&P 500.

The institution forecast fiscal third-quarter gross to beryllium betwixt $4.4 cardinal and $4.8 billion, and adjusted nett successful the scope of $12-$14 per share. The midpoints of some were supra the estimated $2.77 cardinal ⁠and $4.37 per share, respectively, according ‌to information compiled by LSEG.

"Earnings are supra the semipermanent trend, but based connected our information points it seems apt to enactment that ‍way for much than 1 twelvemonth - truly for arsenic agelong arsenic the AI trajectory remains this robust," Morgan Stanley analysts said successful a note.

Rivals Western Digital, Seagate Technology and manufacture ​giant Micron Technology person besides posted robust gains of late, with representation spot ‌makers emerging among the winners successful the AI contention truthful far.

Western Digital besides forecast third-quarter gross up of expectations, though its shares were down 5.5%.

With representation chips facing an acute shortage worldwide, AI and consumer-electronics companies are competing for dwindling supplies, a compression that is expected to enactment a multi-year backlog for manufacturers.

Morningstar analysts ⁠expect proviso constraints to endure until astatine slightest ​2028, which could make important maturation for Sandisk.

The ​company reported income of $3.03 cardinal and adjusted nett of $6.2 per stock for the 2nd quarter, some surpassing the estimates.

Sandisk secured its flash spot ‍supply done a associated ⁠venture with Kioxia Corp successful Japan and the companies said they person extended their proviso statement done the extremity of 2034, from its erstwhile ⁠expiration astatine the extremity of 2029.

At slightest 5 brokerages raised their terms targets connected the stock, with ‌Bernstein's telephone of $1,000 among the highest connected Wall Street.

(Reporting by Shashwat ‌Chauhan successful Bengaluru; Editing by Shilpi Majumdar)