SanDisk Corp. (SNDK) surged 9.38% during intraday trading on Tuesday, leading a broad rally in the storage and chip sector.

The sharp rise was fueled by a bullish outlook from Wall Street analysts and growing demand for memory in artificial intelligence infrastructure. Morgan Stanley maintained its positive stance on the storage sector, highlighting that memory is increasingly becoming a primary bottleneck for AI infrastructure buildout—a structural constraint expected to persist for years. The firm estimated that third-quarter data center memory contract prices rose at least 25% quarter-over-quarter, exceeding forecasts.

Additional catalysts included comments from SK Hynix's chairman that AI semiconductor demand is expected to grow 60% to 100% year-over-year next year, while major manufacturers have virtually no substantial capacity expansion plans. Multiple Wall Street firms recently raised SanDisk's target price, with Bernstein maintaining a Buy rating and a $3,000 price target, Goldman Sachs lifting to $2,200 and Evercore ISI to $3,100. The AI trade made a strong comeback as investors returned to the sector following a recent sell-off.