The Ripple Effects of the AI Data Center Boom

Trade in stocks exposed to the AI boom is getting even more volatile. Shares of Sandisk rocketed 27% on Tuesday for no obvious reason other than a report by Morgan Stanley about bigger-than-expected price increases coming for NAND flash memory, which Sandisk makes, among others. Demand for NAND flash has taken off in recent months, thanks to its value in AI data centers. As we noted on New Year’s Eve, Sandisk was one of the best-performing stocks of last year—rising 559%—and it’s up 47% in the first three trading days of 2026.

On the other hand, as Bloomberg first reported here, investors sold stocks of companies that supply cooling equipment for data centers, such as Modine Manufacturing and Johnson Controls. Those stocks got hit because Nvidia CEO Jensen Huang said on Monday that the company’s new AI server racks wouldn’t need outside cooling equipment. These companies have lately seen strong demand from data center companies, helping lift their stocks, but the winds have shifted. Modine, for instance, which last year said it planned to “significantly expand” U.S. manufacturing capability for data center products, saw its stock price fall 7.5% on Tuesday. The stock had doubled in the previous two years.