SanDisk climbed notably in early Thursday trading, advancing +6.82% to $1,844.96 after a Reuters report, citing an internal Meta Platforms memo, said Meta has locked in long-term, multi-year supply agreements for flash storage from SanDisk, memory chips from Samsung Electronics, and fiber-optic gear from Sumitomo Electric as part of an extensive AI computing infrastructure build-out.
The memo, as described in the report, explicitly names SanDisk as Meta's flash storage supplier, positioning the company as the most direct publicly traded beneficiary of the arrangement. SanDisk's gain follows a difficult period for the NAND-flash sector earlier in the week that the market began to reverse on Thursday.
According to the memo details cited by Reuters, Meta plans to bring seven gigawatts of computing capacity online in 2026 and to double that capacity to 14 gigawatts in 2027. A central element of the planned expansion is "Iris," Meta's next-generation in-house AI chip. The memo indicates Iris is slated to enter production in September 2026 after completing six weeks of bug testing with no major issues reported. Iris represents the latest stage of Meta's four-generation MTIA initiative, an internal effort to reduce dependence on external vendors such as Nvidia and AMD.
Neither Meta nor SanDisk has confirmed the specific terms or monetary value of the flash storage agreement. SanDisk declined to comment to Reuters, and Meta did not respond to requests for comment.
Certain public disclosures, however, are on record and substantial. In its most recent earnings release, SanDisk reported it had secured multi-year supply agreements representing roughly $42 billion in minimum contracted revenue. The company also reported that revenue in its fiscal third quarter nearly doubled to $5.95 billion, and that non-GAAP gross margin widened to 78.4%. Those results reflected an acute shortage of NAND flash storage that has helped make SanDisk the S&P 500's top-performing stock in the first half of 2026. SanDisk was spun out of Western Digital in February 2025 at about $38.50 per share and has risen more than 800% year-to-date.
Thursday's price action extended a broader recovery across the memory and storage complex. Micron gained roughly 8%, while Western Digital and Seagate each rose by about 7%. The sector's rebound followed an early-week selloff that erased prior gains before stocks began to recover.
Sumitomo Electric's U.S.-listed ADR (OTC: SMTOY) also moved higher after being identified in the memo as Meta's fiber-optic equipment supplier for the infrastructure build. The ADR climbed approximately +4.71% to $7.67 following the report.
Meta Platforms itself traded in the opposite direction on Thursday, slipping -2.18% to $589.97 as investors weighed the strategic rationale of the infrastructure expansion against its considerable cost. The memo and related coverage note that Meta expects to spend as much as $145 billion on AI infrastructure in 2026, a figure that represents a substantial portion of Big Tech's projected collective spending. Analysts have highlighted that rising memory and chip prices have pushed "chipflation" into a macroeconomic consideration - a dynamic that benefits suppliers such as SanDisk while increasing cost pressure on major buyers like Meta.
Market participants will be watching several near-term catalysts that could clarify investor appetite for AI-memory exposure. One immediate event is SK Hynix's planned U.S. Nasdaq IPO pricing on July 10, which market observers expect will provide a gauge of institutional demand for companies tied to AI memory supply.
For now, the Reuters-cited memo has triggered rallies across supplier equities while prompting scrutiny of how the planned infrastructure spending will affect buyers and the broader technology sector. Details remain limited outside the memo's contents and SanDisk's recent financial disclosures, leaving some financial specifics of the newly reported supply commitments unconfirmed.
Key points
- SanDisk named in Meta memo as flash storage supplier; stock rose +6.82% to $1,844.96 in early trading.
- Meta memo outlines a plan for seven gigawatts of computing capacity in 2026 and 14 gigawatts in 2027, with the "Iris" AI chip entering production in September 2026 after six weeks of testing.
- SanDisk reported multi-year supply agreements representing roughly $42 billion in minimum contracted revenue, with fiscal third-quarter revenue of $5.95 billion and non-GAAP gross margin of 78.4%.
Risks and uncertainties
- Terms and financial value of the reported supply agreements have not been officially confirmed by Meta or SanDisk, leaving material details unverified - impacting investors in supplier and buyer equities.
- Meta's planned AI infrastructure spending - cited as up to $145 billion for 2026 - presents a potential strain on the company's finances and creates macroeconomic pressure through rising memory and chip prices, affecting both technology buyers and suppliers.
- Market reaction to upcoming events, such as the pricing of SK Hynix's U.S. Nasdaq IPO on July 10, could shift capital flows across memory and storage stocks and change investor sentiment toward the sector.