The 2 Chip Stocks Leading the S&P 500’s Boom in 2025 Are Not Who You Think

• The S&P 500 is having a banner year, up 17% and adjacent its all-time high, but the leaders aren’t who you would expect.

• SanDisk (SNDK) surged 534% successful 2025 aft spinning disconnected from Western Digital successful February.

• Western Digital (WDC) jumped 275% by focusing connected high-capacity HDDs for AI storage. Revenue grew 30% successful fiscal Q4.

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The twelvemonth is winding down and the S&P 500 has climbed 17% successful 2025, hovering conscionable shy of its all-time precocious amid robust economical maturation and dependable firm earnings. While headlines fixate connected artificial quality (AI) leaders specified arsenic Nvidia (NASDAQ:NVDA) and Palantir Technologies (NASDAQ:PLTR), overmuch of the index's surge is owed to an unexpected duo: storage-focused chipmakers.

The apical 2 performers this twelvemonth are semiconductor stocks, but not the accustomed suspects powering AI accelerators. Instead, request for monolithic information retention successful unreality and AI infrastructure has propelled these underdogs. Sandisk (NASDAQ:SNDK) and Western Digital (NASDAQ:WDC) fertile arsenic the benchmark index's champion stocks this twelvemonth (industry adjacent Seagate Technology (NASDAQ:STX) was the S&P's fourth-best stock). Let's find retired wherefore they trounced the industry's header names.

Sandisk has redefined 2025's spot narrative, surging 534% year-to-date since its February spinoff from Western Digital. This flash representation specialist, erstwhile overshadowed successful the broader retention conglomerate, present stands unsocial arsenic a pure-play NAND supplier, capitalizing connected acute shortages successful high-capacity chips indispensable for AI information centers.

The breakout began with the split, allowing Sandisk to absorption connected flash accumulation without the distractions of HDDs. Revenue jumped 10% to $7.36 cardinal successful fiscal 2025, driven by AI hyperscalers similar Amazon's (NASDAQ:AMZN) AWS and Google Cloud ramping up exabyte-scale retention needs.

Analysts constituent to NAND prices soaring 50% amid proviso constraints, boosting margins to 35% -- acold supra the manufacture mean of 25%. Unlike Nvidia's GPU dominance, Sandisk's borderline lies successful backend infrastructure: each AI exemplary trained requires petabytes of persistent storage, an country wherever flash excels successful velocity and density.

This has outpaced not conscionable alleged AI stocks but the full S&P 500. While Nvidia's net jumped 51% truthful acold successful 2025 connected spot demand, Sandisk's vertical integration -- from wafer fab to SSD packaging -- delivered 188% adjusted net growth, drafting upgrades to "Strong Buy" with targets adjacent $264 per share. Its inclusion successful the S&P 500 past period led to scale money inflows, pushing shares from astir $40 astatine the spinoff to $228 per stock today.