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Geoffrey Seiler, The Motley Fool
Sat, May 23, 2026 astatine 7:05 AM CDT 5 min read
There has been a batch of chatter successful the marketplace that investors request to beryllium cautious of representation stocks pursuing their beardown performance, contempt the stocks successful the assemblage inactive trading astatine inexpensive valuations. The crushed for this is that historically, some the DRAM and NAND (flash) markets person been highly cyclical with precise ample roar and bust cycles.
However, it is surely noteworthy that renowned billionaire capitalist David Tepper of Appaloosa Management accrued his vulnerability to the assemblage successful Q1, buying shares of some Sandisk (NASDAQ: SNDK) and Micron Technology (NASDAQ: MU). Micron is Tepper's second-largest presumption behind Amazon, and successful Q1, helium accrued his shares by 11%. Meanwhile, Sandisk was a caller position, representing astir 3% of his portfolio. In fact, it was his lone caller presumption successful the quarter.
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Let's look astatine wherefore Tepper whitethorn beryllium attracted to representation stocks adjacent aft their beardown runs.
Sandisk: A NAND axenic play
Sandisk is the market's lone pure-play NAND (flash) representation shaper aft being spun retired of Western Digital past year. The institution has benefited from surging request related to artificial quality (AI) and flash representation proviso constraints, which person pushed up NAND pricing.
NAND is simply a non-volatile benignant of memory, which means it retains its information adjacent erstwhile the powerfulness is turned off. It's slower than volatile DRAM, which loses its information erstwhile it is not connected to a powerfulness source. As such, NAND is utilized for longer-term information storage, portion DRAM is utilized for short-term, impermanent storage.
The NAND marketplace saw a immense surge during the pandemic, arsenic radical mostly confined to their homes drove a large uptick successful electronics sales. However, this led to a propulsion guardant successful demand, and erstwhile the pandemic was over, the flash representation marketplace crashed to the constituent wherever companies had antagonistic gross margins. This caused the large representation makers to chopped NAND accumulation and crook much of their resources to the DRAM market.
With the emergence of that marketplace owed to AI, NAND proviso has been dilatory to return, portion astatine the aforesaid time, AI grooming needs monolithic solid-state drives (SSDs) to clasp grooming data. This dynamic has resulted successful surging NAND prices, immense gross growth, and ballooning gross margins for Sandisk. Citigroup precocious said it expects NAND retention prices to beryllium up 186% this year, with SSD prices climbing adjacent higher.
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