Sandisk (NASDAQ: SNDK), Micron (NASDAQ: MU), and Lumentum (NASDAQ: LITE) have all delivered extraordinary gains over the past year, with momentum that analysts believe may not yet be exhausted.
Sandisk leads the group with a staggering 2,900% gain as of the end of August, making it one of the most dramatic stock stories in recent memory.
The company is a pure-play maker of NAND flash memory and has benefited enormously from a wide supply-demand imbalance that has pushed NAND prices significantly higher.
After the NAND market crashed post-pandemic, major memory makers slashed capacity and redirected resources toward DRAM and high bandwidth memory used to power AI chips.
Soon after that capacity was cut, however, demand for massive solid-state drives used to store AI training data began to surge, creating a significant gap between supply and available inventory.
Sandisk has moved to lock in revenue stability by signing long-term agreements, with its first three contracts worth a minimum of $42 billion covering a range of multi-year periods.
The company says it has five agreements in place for periods of up to five years, covering one-third of its expected fiscal 2027 capacity, with a goal to push that figure above 50%.
Despite that enormous price surge, Sandisk still trades at a forward price-to-earnings ratio of just 7, which suggests the market has not fully priced in its long-term growth potential.
Micron, up nearly 700% over the past year as of the end of August, is another memory giant riding the same wave of supply constraints and surging AI-driven demand.
Micron reported that 76% of its revenue last quarter came from DRAM and 24% from NAND, with both segments benefiting from tightening supply conditions across the memory market.
A key constraint in the DRAM market is tied to EUV, or extreme ultraviolet lithography machines, which are required to manufacture the critical layers of high bandwidth memory used alongside AI chips.
ASML is the only company in the world that manufactures these machines, creating a hard ceiling on how quickly HBM production can be expanded to meet demand.
Adding further pressure, HBM requires upward of three times the wafer capacity of regular DRAM, which limits overall growth and pulls capacity away from conventional DRAM production.
Like Sandisk, Micron has also locked in longer-term contracts and trades at a forward P/E of just 6, leaving room for substantial upside if the current supercycle extends into 2030 and beyond.
Lumentum, up 550% over the past year, is capitalizing on a structural shift in AI data centers away from copper wire toward high-speed optical networks.
The company produces high-power indium phosphide lasers that convert electricity into light for data transmission, and holds up to a 60% market share for these advanced components.
Lumentum also maintains strong positions in optical circuit switches and co-packaged optics markets, giving it broad exposure to the infrastructure buildout powering modern AI systems.
The company holds over 1,000 patents and carries decades of manufacturing scale that provide a yield and cost advantage that competitors would find extremely difficult to replicate.
Once a laser or transceiver component is certified for an AI platform deployment, the risk of it being replaced by a competitor is low, giving Lumentum a durable competitive position.
With AI data centers still in the early stages of transitioning from copper to optical networks, all three of these stocks may have significant runway remaining despite their remarkable recent gains.
