Storage and memory stocks have delivered spectacular year-to-date performances: SanDisk surged 496%, Seagate 238%, Micron 208%, and Western Digital 171%. These four companies have undergone a profound transformation of their business model, abandoning massive plant construction in favor of long-term supply agreements and massive share buyback programs: $6 billion for SanDisk, $5 billion for Seagate, $4 billion for Western Digital. Their non-GAAP gross margins have reached record highs: SanDisk went from 22% to 78% in one year, Micron from 30% to 85%. Market capitalizations have exploded accordingly, with Micron rising from $136 billion to $1 trillion in one year. The article argues that these companies have become indispensable players in the data center buildout, despite persistent investor skepticism fearing a breakdown of discipline agreements among competitors.
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