Investors have spent the last year captivated by the explosive rally in the semiconductor sector. SanDisk (NASDAQ: SNDK), the flash memory giant recently spun off from Western Digital (NASDAQ: WDC), has become the latest market obsession. The stock has risen by over 700% in the last year. Following a massive earnings beat in early February, the stock surged another 15%, driven by apparently insatiable global demand for data storage.
Seasoned investors understand that semiconductors are merely ingredients. They do not exist in a vacuum; they are purchased for installation in devices. We are currently witnessing a significant shift in the artificial intelligence (AI) landscape. The market is moving from the AI Training phase, which takes place in massive centralized cloud data centers, to the AI Inference phase. This new phase involves running AI models locally on physical devices at the network edge, including laptops, desktops, and private AI servers.
