SanDisk (SNDK) shares rallied strongly on Friday, climbing as much as 8.9% and touching an intraday peak of $1,693.71 before stabilizing near $1,687 during mid-morning trading. The advance left the stock up roughly 8.5% for the session, although trading volume remained notably below its typical average of 13.9 million shares. SanDisk, which was spun off from Western Digital in February 2025 as a standalone NAND flash memory maker, has seen its shares increasingly trade in sympathy with AI infrastructure news given memory's central role in data center buildouts.

What Sparked the Rally

Nvidia announced Thursday evening that it plans to acquire Hugging Face in a transaction valued at $12.9 billion. The widely used open-source AI development platform has more than 18 million registered users, hosts 3 million AI models, and serves over 200,000 enterprises building and deploying artificial intelligence solutions.

Nvidia CEO Jensen Huang emphasized that more than half of the company's revenue comes from customers "largely driven by open models," noting that Nvidia is Hugging Face's top contributor of open-source models. Industry observers view the acquisition as a strategic move by Nvidia to deepen its position within the AI developer community—a signal that, for memory suppliers like SanDisk, reads as further commitment to expanding the AI ecosystem that drives hardware demand.

The Connection to SanDisk

Strong demand for Nvidia's graphics processing units has created corresponding demand for SanDisk's NAND flash memory products, which are essential components of modern AI-focused data centers, where high-capacity flash storage is used for storing training datasets, checkpoints, and fast data access alongside GPU compute. Developments that benefit Nvidia's AI strategy therefore tend to translate into stronger demand for SanDisk's components.

This linkage received validation earlier in the week when Dell Technologies Chief Operating Officer Jeffrey Clarke identified memory as the critical constraint on AI server production. "The constraints remain the same," Clarke said. "DRAM, DRAM, DRAM, followed by NAND, NAND, NAND."

Strong Sector Fundamentals

Beyond the Nvidia announcement, underlying NAND market conditions remain robust. Worldwide NAND flash revenue jumped approximately 70% sequentially in Q2, driven by continued AI infrastructure expansion requiring substantial flash storage capacity. Industry supply remains constrained while pricing holds steady.

Investment firm Bernstein continues to recommend SNDK with a $3,000 price objective, citing what analysts describe as a sustained, multi-year NAND supply shortage. Peer Micron Technology also advanced roughly 4% on Friday, indicating the momentum extends across the memory chip sector rather than being isolated to SanDisk. For investors watching the space, upcoming NAND pricing data and additional commentary from AI server makers on memory constraints are likely to be the next indicators of whether the supply-tightness thesis holds.

Favorable Macro Conditions

U.S. Treasury yields declined ahead of Friday's key economic releases, giving investors an additional incentive to return to high-growth semiconductor stocks that had recently suffered amid rising interest rates.

The broader market offered little help, with the S&P 500 down 0.5% and the Nasdaq Composite off 0.48%, underscoring that SanDisk's strength stemmed from sector-specific factors.

Despite Friday's gains, SNDK remains more than 30% below its 52-week high of $2,354.39. Trading at 23 times trailing earnings and 8 times forward earnings estimates, the shares are valued lower than many other AI-focused memory chip manufacturers.

Regarding insider activity, SanDisk Chief Legal Officer Bernard Shek sold 600 shares at $1,525.60 on September 1 under a previously established Rule 10b5-1 trading plan—standard administrative activity with no meaningful market implications.

Bernstein's $3,000 price objective for SNDK remains unchanged, with the stock currently trading around $1,687.