--- title: "Melius Research: The AI boom will drive storage demand growth until the end of this decade, initiating a \"Buy\" rating for Micron Tech and Sandisk" type: "News" locale: "en" url: "https://longbridge.com/en/news/284276172.md" description: "Melius Research believes that the AI boom will drive storage demand to continue growing until the end of this decade, and has given Micron and Sandisk a \"Buy\" rating for the first time, with target prices of $700 and $1350, respectively. Micron's stock price rose by 5.6%, while Sandisk increased by 8.1%. Analysts point out that storage has become an important component of the investment logic in AI. Despite significant stock price increases, the market's valuation of storage stocks remains conservative, with the expected price-to-earnings ratio over the next 12 months significantly below the industry average" datetime: "2026-04-27T22:31:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284276172.md) - [en](https://longbridge.com/en/news/284276172.md) - [zh-HK](https://longbridge.com/zh-HK/news/284276172.md) --- # Melius Research: The AI boom will drive storage demand growth until the end of this decade, initiating a "Buy" rating for Micron Tech and Sandisk According to the Zhitong Finance APP, Wall Street research firm Melius Research believes that the artificial intelligence boom will drive storage demand to continue growing until the end of this decade, and the stock prices of the two storage chip giants, Micron (MU.US) and Sandisk (SNDK.US), still have further upside potential. Melius initiated coverage on Micron and Sandisk on Monday, giving both companies a "Buy" rating, with a two-year target price set at $700 and $1350, respectively. The firm pointed out that storage is becoming a core component of the entire AI investment logic driven by AI. Driven by positive news, Micron rose 5.6% on Monday, closing at $524.56, with a cumulative increase of 558% over the past 12 months; Sandisk rose 8.1%, closing at $1070.20, with a cumulative surge of 3158% over the past year. The company will announce its financial report after the market closes on Thursday. Melius analyst Ben Reitzes stated that the market should begin to recognize that storage has become an important part of AI investment logic, forming a deep linkage with AI semiconductors, AI hardware, and hyperscale cloud service providers. Despite the astonishing rise in stock prices, Melius believes that the market's valuation of storage stocks remains conservative. Currently, the expected price-to-earnings ratios for Micron and Sandisk over the next 12 months are approximately 6.4 times and 10.3 times, significantly lower than the average of about 25 times for the Philadelphia Semiconductor Index. If more customers sign long-term supply agreements, there is still room for the aforementioned valuations to improve. The firm believes that storage has become "critically important" for customers. As the performance of AI models increasingly relies on higher memory capacity, the rise of AI complexes is also driving higher storage demand across various computing levels, leading to exponential growth in storage demand. Reitzes pointed out that if the AI trend continues, the upward trend in storage prices may persist, as the supply-demand relationship is undergoing structural changes. Melius believes that unlike the last downturn in the storage industry at the beginning of this century, when demand declined and inventory piled up, the current AI cloud computing spending provides demand support, and the sales model is shifting from spot purchases to long-term supply contracts, weakening the cyclical nature of the industry. Wall Street as a whole generally supports this logic. FactSet data shows that more than three-quarters of analysts give Sandisk a "Buy" rating, and 92% of analysts are optimistic about Micron. Meanwhile, Morgan Stanley analyst Joseph Moore also raised Sandisk's target price from $690 to $1100, maintaining an "Overweight" rating. He pointed out that the price momentum of Sandisk's core NAND storage business is expected to continue, as demand from hyperscale cloud service providers is squeezing supply from other buyers, which will continue to support price increases. Morgan Stanley expects Sandisk to deliver strong financial results and optimistic guidance on Thursday. However, the firm also cautioned that since Sandisk has already risen 68% since April, even with strong performance, the stock price may not immediately rise further ### Related Stocks - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [SNDK.US](https://longbridge.com/en/quote/SNDK.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [MUU.US](https://longbridge.com/en/quote/MUU.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [DRAM.US](https://longbridge.com/en/quote/DRAM.US.md) - [MULL.US](https://longbridge.com/en/quote/MULL.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [FDS.US](https://longbridge.com/en/quote/FDS.US.md) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [SNDKV.US](https://longbridge.com/en/quote/SNDKV.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Related News & Research - [SanDisk: Is a 20x Surge Just the Beginning or a Peak for This AI Pure-Play?](https://longbridge.com/en/news/283711373.md) - [Prediction: This Artificial Intelligence (AI) Growth Stock Will Be the Nasdaq's Biggest Winner Over the Next 12 Months](https://longbridge.com/en/news/283435510.md) - [Micron’s HBM Sell Out And Export Push Reshape AI Memory Outlook](https://longbridge.com/en/news/284120152.md) - [Why Micron (MU) and SanDisk (SNDK) Stocks Are Up Today and What Comes Next](https://longbridge.com/en/news/284240094.md) - [The Nasdaq is approaching all-time highs. 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