By Dan Gallagher

It's a great time to be in the business of selling memory, but much less so if you have to buy it.

Such was evident in trading Tuesday. Sandisk, a maker of NAND flash memory, surged 25% while hard-drive makers Seagate and Western Digital jumped 14% and 17% respectively. Micron, which produces primarily DRAM memory chips, was up 8.7%.

All four stocks have already been on a tear over the past few months. Western, Micron and Seagate were top gainers on the S&P 500 for 2025. That's because booming demand for artificial intelligence systems also drives big sales of the memory chips needed to run those systems, as well as ways to store the reams of new data that AI computing creates.

That demand has already strained production capacity and driven up prices, and experts see further price jumps on the horizon. In a report Monday, market research firm Trendforce projected that contact prices for NAND flash memory will jump 30%-35% just in the first quarter of this year. Nvidia CEO Jensen Huang also talked up the need for more data storage in his CES keynote address on Monday.

On Tuesday, Morgan Stanley analysts noted that tight supply of hard drives has major cloud network operators using more flash-based solid-state drives "despite being far less efficient" in total cost of ownership compared with regular hard drives.

The shortage has memory producers focusing mostly on the lucrative AI market, which is being driven by blowout capital spending increases by the largest tech companies.

But that means higher prices will fall hardest on the companies buying memory for other tech products such as PCs and smartphones. Apple's stock slipped 1.7% on Tuesday after Morgan Stanley's analysts predicted that the company's flash memory supplier will "raise prices more aggressively" on the iPhone maker to catch up with market prices.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free morning newsletter here.

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(END) Dow Jones Newswires

January 06, 2026 15:11 ET (20:11 GMT)

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