SanDisk Corp. (SNDK) shares surged 7.82% in after-hours trading on Monday, following two significant developments that boosted investor confidence in the memory chip maker. The company is set to join the prestigious S&P 500 index, and it received a price target upgrade from a major investment bank.

S&P Dow Jones Indices announced that SanDisk will be added to the S&P 500 index effective November 28, replacing The Interpublic Group of Companies. This move is expected to increase demand for SanDisk shares, as index funds and ETFs tracking the S&P 500 will need to add the stock to their portfolios. The inclusion in the S&P 500 also signifies SanDisk's growth, as the company has quadrupled in value since its spinoff from Western Digital in February.

Adding to the positive sentiment, Morgan Stanley raised its price target for SanDisk to $273 from $263, while maintaining an "Overweight" rating on the stock. The upgrade reflects growing optimism about SanDisk's prospects in the booming memory chip market, driven by increasing demand from data centers, smartphones, and AI applications. The company's stock has already gained nearly 400% in the past three months, riding the artificial intelligence boom.