Why WDC, MU, STX, SNDK Stocks Rallied Hard Today And Lifted DRAM To ‘Solid Breakout’

In a Stocktwits poll, more than three-quarters of nearly 1,000 users who voted said they expect the rally to have further room to run.

• Western Digital stock gained 16%, extending its gain to 33% over the last three sessions.
• Stocktwits sentiment for WDC shifted to ‘extremely bullish’ from ‘bearish’ alongside a sharp jump in message volume.
• The U.S. and Iran announced a peace deal, triggering gains in global markets on Monday.

Western Digital and Micron shares hit fresh records on Monday, leading advances in the red-hot memory-chip sector amid a broad market rally following the U.S. and Iran's announcement of a peace agreement to end the conflict in the Middle East.

Western Digital stock surged 16%, extending its gain to 33% over the last three sessions, while Micron stock climbed 10.8%. Seagate stock advanced 9.4% and SanDisk stock added 6.5%. South Korean memory-chip giants SK Hynix and Samsung also moved higher, helping drive the Roundhill Memory ETF (DRAM) up 9.3%.

SK Hynix, Samsung and Micron are the top three holdings of DRAM. To be sure, the stocks and DRAM marginally pared those gains in the overnight trading.

WDC Stock Gets the Spotlight

While Micron and SanDisk have largely been the focus of the memory upcycle, Western Digital jumped to the forefront on Monday. On Stocktwits, the retail sentiment for WDC shifted to ‘extremely bullish’ by late Monday, up from ‘bearish’ the previous day, with 24-hour message volume surging to over 2,900 and watcher count increasing by 0.8%.

“$DRAM solid breakout. Took some profits here, will average up later. Parabolic moves,” a trader said. 

Another wrote: “$WDC running hot all session, up 14.7% on what's already a massive 3-month chart. No read on what's driving today's leg, but this thing has been grinding higher for a while.”

Retail sentiment for DRAM shifted to ‘neutral’ from ‘bearish.’ It remained ‘bearish’ for MU and STX, and ‘bullish’ for SNDK.

On Monday, Morgan Stanley raised its price target on WDC to $650 from $488 (the target is below WDC’s Monday closing price of $653.53), while maintaining an ‘Overweight’ rating. Following meetings with management, including CEO Irving Tan and CFO Kris Sennesael, the research firm said it has gained “even greater conviction” that demand for hard-disk drives is strengthening. 

It pointed to customers seeking capacity visibility through 2032, a favorable outlook for per-terabyte pricing, the planned launch of UltraSMR and HAMR products between the second half of this year and the first half of next year, and an accelerating pace of capital returns.

Memory Stocks: Retail Traders Have Bigger Expectations

Memory-chip stocks have rallied sharply over the past year on booming demand from AI data centers. While companies and analysts continue to project strong demand for years to come, investors are increasingly questioning how much of that growth is already reflected in share prices and how much upside remains.

More than three-quarters of nearly 1,000 users who voted in a Stocktwits poll said they remain bullish on the memory-chip sector and expect the rally to have further room to run.

Year to date, SNDK has gained a staggering 788%, while MU and WDC have added about 280% each, and STX has added 271%.

Markets Breathe Easier After US-Iran Peace Deal

The U.S. and Iran agreed on an interim peace deal on Sunday, a potentially major breakthrough after nearly four months of fighting that created global political and economic turmoil. A formal agreement is expected to be signed on the weekend, and the Strait of Hormuz could resume business as usual as early as Friday.

The benchmark S&P 500 rose 1.7% on Monday, while the tech-heavy Nasdaq ended flat.

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