Seagate and Sandisk Stocks Emerge on Firefighting News. Should You Buy Memory Stocks Now?

Memory and storage stocks rose after the announcement of a two-week truce between the US and Iran this week, easing fears about a possible disruption in the Strait of Hormuz and restoring appetite in semiconductor markets. Shares of Seagate Technology Holdings plc ( STX ) and Sandisk Corporation ( SNDK ) rallied sharply against peers, reversing recent weakness as investors turned back to high-beta AI infrastructure plays.

A few days earlier, political tensions weighed on the sector, causing a backlash in terms of memory. The announcement of the ceasefire, although temporary, has improved near-term supply chain visibility, especially for key inputs such as energy and industrial gases, allowing investors to refocus on the demand cycle driven by powerful artificial intelligence (AI).

However, it remains to be seen whether this move marks the beginning of a sustained development or just a temporary relief rally. So, are STX and SNDK worth buying now?

Seagate Technology is a leading global provider of data storage solutions, specializing in hard disk drives (HDDs) and mass storage systems used across enterprise data centers, cloud infrastructure, and consumer devices. The company is officially headquartered in Dublin, and has a market cap of $109.2 billion, which shows its strong position in the data storage cycle driven by AI and the growing demand from hyperscale cloud providers.

STX has staged a massive rally over the past year, with the stock up a staggering 625.85%. On a year-to-date (YTD) basis, momentum remains extremely strong, with STX up 83.82%, driven by AI-led demand.

Recently, the stock extended its rally following the announcement of a US-Iran ceasefire around April 7, which eased geopolitical concerns and caused volatility to return to semiconductor names. STX rose about 3.4% on April 7, and 5.9% on April 8, extending an already battered rally. The stock far outperformed the S&P 500 Index’s ($SPX) 29.45% return last year and 0.38% decline this year.

Statistically, the stock trades at 40.97 times forward earnings, which is higher than the sector median but lower than its five-year average.

Seagate Technology reported strong financial results for the second quarter of 2026 on Jan. 28, highlighting the increasing momentum from AI-driven storage demand. The company posted revenue of $2.8 billion, up 22% year-over-year (YOY), while non-GAAP EPS increased to $3.11 from $2.03 in the prior-year period, exceeding expectations and demonstrating significant margin expansion and operating strength.

In addition, non-GAAP gross margin increased to 42.2% from 35.5%. In addition, management issued a financial outlook for Q3 2026, guiding revenue of $2.9 billion (±$100 million) and non-GAAP EPS of $3.40 (±$0.20).

Analysts tracking STX project the company’s earnings to reach $12.11 per share by 2026, up 66.8% from the prior year.

Wall Street’s outlook on the stock is positive, with an overall “Strong Buy” rating. Of the 25 analysts covering the stock, 19 recommend a “Strong Buy,” one picks a “Neutral Buy,” and the remaining five suggest a “Hold.”

The stock has already surpassed an analyst price target of $483.96, while the Street-high price target of $700 suggests STX could rally 39% from here.

SanDisk Corporation is a leading provider of NAND flash memory and storage solutions, offering products used across data centers, enterprise systems, and consumer devices such as SSDs and embedded storage. Headquartered in Milpitas, California, the company has emerged as a key beneficiary of the AI-driven memory demand cycle following its 2025 split with Western Digital. Sandisk has a market cap of $125.7 billion.

Sandisk has been one of the dominant players in the semiconductor space, delivering a 52-week extraordinary return of 2,669.7%, driven by an AI-led surge in NAND demand and price recovery. And YTD, the stock has continued its meteoric rise, gaining nearly 262.64%, reflecting strong momentum and investor positioning around rising memory power and outperforming the $SPX.

In addition, the SNDK saw a sharp leg higher following the announcement of the US-Iran ceasefire, which reduced the risk of the political environment and created a broader semiconductor rally. The stock jumped 9.86% on April 8, closing at about $780.90.

Priced at 20.37 times forward earnings, the stock trades at a discount to sector limits.

SanDisk’s earnings for the second fiscal quarter of 2026, released on Jan. 29, exceeded expectations. The quarter ended Jan. 2, SanDisk reported revenue of just over $3 billion, representing a 61% YOY increase, driven by broad demand across the data center, edge, and consumer segments and consensus forecasts far exceeding.

Additionally, on a non-GAAP basis, EPS came in at $6.20, up $1.23 from last year and above analysts’ expectations. Gross margins increased significantly to 51.1%, an increase of approximately 18.6 percentage points compared to the year-ago quarter, reflecting strong pricing and a favorable mix of premium SSD products.

Along with the earnings beat, SanDisk issued strong guidance for the third quarter of fiscal 2026, projecting revenue of $4.4 billion to $4.8 billion and non-GAAP EPS in the range of $12.00 to $14.00.

Analysts remain optimistic, predicting EPS of $38.34 for fiscal 2026, a huge jump of 2,053.93 YOY.

Wall Street is generally bullish, according to SNDK’s “Strong Buy” rating. Of the 20 analysts covering the stock, 14 recommend a “Strong Buy,” one advises a “Moderate Buy,” and the remaining five analysts play it safe with a “Hold.”

SNDK has already surpassed its analyst price target of $752.24, while the Street-high target of $1,000 suggests the stock could rise as much as 17.5%.

As of the date of publication, Subhasree Kar had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com