SanDisk Corp. (SNDK) shares surged 5.01% in after-hours trading on Wednesday, riding a wave of optimism in the memory chip sector. The rally comes on the heels of a report suggesting that Nvidia's strategic shift could lead to a significant boost in server-memory prices, potentially benefiting memory manufacturers like SanDisk.

According to a report from Counterpoint Research, Nvidia's decision to switch to smartphone-style LPDDR (Low-Power Double Data Rate) memory for AI servers could double server-memory prices by late 2026. This move is expected to create a sudden demand surge that the industry may struggle to meet, potentially leading to a "seismic shift" in supply chains and pricing dynamics.

The positive sentiment wasn't limited to SanDisk alone. Other memory chip makers also saw gains in the broader market session, with Micron Technology up 2.8%, Western Digital advancing 1.06%, and Seagate Technology rising 0.75%. This sector-wide movement underscores the potential impact of Nvidia's strategic shift on the entire memory chip industry.

Investors appear to be betting on SanDisk's potential to capitalize on this emerging trend in the AI server market. As cloud providers and AI developers face rising costs due to the projected increase in memory prices, companies like SanDisk could see a significant boost in demand and pricing power for their products.