In the logic of silicon, the rules of carbon seem to be losing their grip. A valuation increase of forty times in one year is the ultimate reward the capital markets have bestowed upon Sandisk. In mid-April this year, Sandisk was formally included in the Nasdaq 100 Index, while Atlassian Corp Plc, a giant in the software-as-a-service sector, was removed from the index concurrently. Sandisk's inclusion is an inevitable outcome of the current AI industry boom and one of the most representative signals of a shift in sentiment across global growth sectors such as technology, consumer goods, and healthcare. Naturally, facing a staggering fortyfold surge in one year, a divergence between bullish and bearish views in the market is inevitable. In response to the capital market's frenzied pricing, we believe that riding the wave to enjoy the benefits of a bubble during its formation phase is the most direct feedback the current market offers to high-growth companies. Previously, Sandisk disclosed its financial results for the third quarter of fiscal year 2026, ending April 3. The report showed that Sandisk achieved revenue of $5.95 billion during the period, a staggering year-over-year increase of 251% and a sequential growth of 96.69%, far exceeding the analyst consensus estimate of $4.72 billion. Net profit reached $3.615 billion, a substantial sequential increase of 350%. Adjusted earnings per share were $23.41, also significantly surpassing the market expectation of $14.50 per share. This comprehensively strong earnings report, which exceeded market expectations across the board, is the core fundamental driver behind the sustained rise in Sandisk's stock price. Sandisk stated that the impressive performance in third-quarter revenue was primarily due to increased sales in its data center business and higher product pricing. Sandisk's CEO, David Goeckeler, stated in an official press release: "This quarter represents a fundamental inflection point in Sandisk's journey—our technological leadership enables us to proactively pivot our product portfolio towards high-value end markets centered on data centers." Public information shows that Sandisk was founded in 1988 and is a global core supplier of flash data storage products. It was previously acquired by Western Digital Corporation and completed its spin-off in February 2025, relisting on the Nasdaq as an independent entity. Benefiting from the comprehensive explosion of the global AI industry, the supply-demand dynamics of the global memory chip market have continued to tighten, with significant shortages evident. It is well known that the global memory chip market has two fundamental core categories: DRAM (Dynamic Random-Access Memory) and NAND Flash. HBM (High Bandwidth Memory) is not an independent memory category; it is essentially an advanced stacked form derived from DRAM technology iteration. It is also the segment with the highest industry prosperity and the tightest supply-demand relationship under the current AI industry boom. Looking at the global market share landscape, Samsung and SK Hynix are the absolute industry leaders. Together, these two companies hold approximately 70% of the global DRAM market and about 50%-55% of the NAND market. For HBM products, which are core to AI demand, their combined market share exceeds 80%-90%. The two leading companies have different business focuses: SK Hynix holds over 60% of the HBM product market share, ranking first globally. It has deep ties with leading chip companies like Nvidia and AMD, making it the most critical essential supplier in the current wave of AI computing demand. Samsung employs a full-stack layout, with its DRAM and NAND product shipments both ranking first globally. Sandisk, whose stock price has risen sharply this round, primarily benefits from the explosion in demand for enterprise SSDs (end storage products based on NAND chip packaging), which is the surge in storage demand for AI inference scenarios. From a market structure perspective, Sandisk holds only 4%-5% of the global enterprise SSD market share, while Samsung and SK Hynix together account for over 60% of the global market share. In terms of industry demand priority, the HBM segment's prosperity surpasses that of the enterprise SSD segment, followed by the high-end DDR5 DRAM segment. Hence, the industry consensus circulating in the market is: "Look to Hynix for AI training, and Samsung for full-stack capability." In other words, Sandisk is not the biggest beneficiary of the current memory chip price increase trend, but that hasn't prevented it from becoming the most recognized and brightest-performing storage stock in the U.S. capital markets. The concentrated outbreak of industry demand and continuous product price increases are the core logic behind this memory sector rally. As early as September 2025, Sandisk fired the first shot in memory price hikes. Data from the third-party industry organization Flash Memory Market showed at the time that Sandisk announced price increases of over 10% for all channels and end consumers, officially kicking off a new round of comprehensive price increases for global memory chips. Supported by expectations of continuous price hikes, Sandisk's stock price has climbed steadily. To meet high-end market demand, leading memory manufacturers have announced the discontinuation of DDR4 series products, concentrating capacity on ramping up DDR5 production. However, as capital expenditures from leading AI companies continue to rise and global AI computing infrastructure demand expands simultaneously, memory chip capacity supply remains constrained, ultimately giving rise to the extreme market conditions in this memory cycle. From the current industry landscape, global memory chip demand is expected to remain robust. According to Sandisk's guidance for the fourth fiscal quarter, the company expects revenue between $7.75 billion and $8.25 billion, with a midpoint around $8.0 billion, far exceeding analysts' previous expectations of $6.49 billion to $6.62 billion. Adjusted earnings per share are projected to be between $30 and $33, also significantly surpassing the market's expected range of $22.70 to $23.38. For a long time, as a core NAND flash manufacturer, Sandisk has always been positioned in the component supply segment of the memory industry chain. The core memory market for AI training scenarios is still dominated by three giants: SK Hynix, Samsung, and Micron. To break through industry constraints and achieve differentiation, Sandisk is determined to enter the HBF (Hybrid Bonded Flash) arena. Leveraging its deep technical expertise in 3D NAND stacking technology and Chip Bonding Array (CBA) wafer bonding processes, it aims to develop high-capacity, high-speed access NAND-based products similar to HBM, attempting to compete with industry giants from the same starting line. From Sandisk's series of business moves, the company's strategic transformation intent is very clear. Simply put, Sandisk is attempting to proactively carve out a brand-new incremental market segment positioned between the roughly $10 billion HBM market and the nearly $100 billion SSD market. The core objective is to avoid direct head-on competition with SK Hynix and Samsung. It is precisely based on this strategic background that Sandisk CEO David Goeckeler explicitly stated after the Q3 earnings release that Sandisk will actively advance the transformation of its product portfolio towards high-value end markets centered on data centers. Under this strategic plan, Sandisk also has the potential to upgrade from a pure memory component supplier to a one-stop storage solution provider. So, since early April 2025, Sandisk's stock price has accumulated gains exceeding 5000%. From the perspective of the global memory industry competitive landscape, Sandisk is not the optimal industry target. With its current total market capitalization exceeding $229 billion, is there a suspicion of significant overvaluation? In fact, as early as February 2026, the well-known short-selling firm Citron publicly announced a short position on Sandisk. The firm bluntly stated that the current prosperity in the global memory market is essentially a "supply-side manufactured illusion of supply and demand." Citron also pointed out that the planned industry capacity already equates to twice the peak industry levels of 2018. Once this new capacity is concentratedly released, "a single earnings conference call could reverse the entire industry's supply-demand dynamics." An industry research report from UBS suggests that AI-driven HBM demand continues to squeeze out traditional DDR capacity. Coupled with the simultaneous surge in traditional server upgrade cycles and storage SSD demand, the global DRAM market supply-demand gap is expected to persist until the fourth quarter of 2027, potentially ushering in a memory super-cycle not seen in nearly thirty years. Although the memory industry's high-growth cycle is expected to continue, from the perspective of earnings realization and valuation matching, Sandisk's current stock price has already significantly priced in future earnings expectations. The core business supporting its valuation surge, HBF, still faces great uncertainty regarding whether it can become a universally adopted mainstream industry standard in the future. Therefore, based on a comprehensive assessment, we believe Sandisk's current valuation bubble is already very severe. If market conditions change or subsequent financial results fall short of expectations, Sandisk's stock price is highly likely to experience significant volatility.