After a pullback in storage chip stocks, U.S. equity investors had been searching for the next market narrative. Optical communications and Neocloud had both emerged as candidate themes. Then the storage group delivered its own catalyst: at its 2026 investor day, SanDisk released a long-term financial model with targets for fiscal 2028 through fiscal 2030, prompting a fresh look at how memory names are being priced.
Two numbers stood out in SanDisk’s guidance
On revenue, SanDisk said it expects annual growth of 15% to 19% over the next several years, with that range sustained for three consecutive years. The article framed that not as a one-off spike, but as a built-in slope in the company’s long-range model.
On profitability, SanDisk projected gross margin of about 80%. In simple terms, that implies roughly 80 out of every 100 units of revenue would remain at the gross profit level. For a segment known for cyclical swings, that margin profile became one of the main reasons the market reacted so strongly.
Structure, not just scale, drove the response
The article argued that the bigger development was SanDisk’s change in commercial structure. The company said it has signed New Business Model, or NBM, agreements with eight customers.
Those agreements, as described in the article, include committed purchase volumes, binding contractual frameworks, minimum financial protections, and structured pricing mechanisms. The purpose is straightforward: align customer demand with the company’s capacity planning more closely and reduce the sharp boom-bust pattern that has long defined the memory business.
The coverage is already meaningful. Existing NBM agreements account for about half of FY2027 bit shipments and roughly two-thirds of FY2028 bit shipments. In the article’s reading, SanDisk is doing two things at once: leaning into long-term AI-driven storage demand while using contracts to lock in more visibility on revenue and cash flow.
Storage stocks moved in tandem
The market response was immediate. SanDisk closed up nearly 14%. The move spilled across the memory group, with Micron up 4% and SK hynix up 7%.
The article placed that move into a broader debate around AI hardware demand. It said that bearish collapse scenarios for the AI chip trade are facing more pushback from company disclosures and earnings data. It pointed to firm renewal pricing for older cards in Neocloud earnings and to SanDisk’s multiyear demand coverage as evidence that the demand breakdown anticipated by some bears has yet to show up.
Nvidia’s A100 contract added another data point
A separate point in the article came from Nvidia CEO Jensen Huang. According to the piece, Nvidia said a recently signed A100 contract will run through 2029.
The A100 launched in 2020. If that contract is executed as planned, it would suggest that the older-generation GPU can still carry commercial rental value nearly a decade after its debut. The article’s emphasis was less on the date itself and more on what it implies: older GPUs can continue generating rental income, remain durable enough for ongoing deployment, and potentially be accepted by financial institutions as collateral.
The article’s broader thesis: AI infrastructure is being priced differently
The closing argument was that the rebound in SanDisk, Micron, and SK hynix over the past week may reflect more than long-term storage demand. It may also reflect a deeper shift in how investors think about AI infrastructure. In the article’s framing, if GPUs can back loans, older cards can be re-leased, and NAND shipments can be secured through long-term contracts, the sector’s valuation anchor starts to move away from a classic cyclical model and closer to infrastructure-style assets.
The piece also highlighted two indicators to watch next: renewal pricing for older GPUs and utilization rates for those older cards. If neither weakens, the window of benefit for storage names could last longer than current market pricing implies.
The original article included a disclaimer stating that it was written by an external author, reflects only the author’s personal views, does not represent BIT’s position or investment advice, and that the information, data, and opinions cited are for reference only and do not constitute any recommendation for trading or financial products.