Sandisk (SNDK +6.16%) has been a remarkable story. While some may associate the name with a consumer division that sells aftermarket memory or storage, it has become one of the hottest stocks in the artificial intelligence (AI) realm over the past few years. It has even rallied so much that it is being included in the Nasdaq-100.
By stock performance, Sandisk may well be 2026’s biggest AI winner. But past returns don’t necessarily make it a buy today. Can Sandisk keep its rally going after such a strong run?
Image source: Getty Images.
Sandisk has delivered huge growth in a short time frame
If you invested $10,000 into Sandisk’s stock at the start of 2026, congratulations: That investment is now worth nearly $40,000. Now, what if you had invested $10,000 at the start of 2025? That investment would now be worth over $250,000. That’s a remarkable rally in a short time frame, and it was hiding under most investors’ noses.
Today’s Change
(6.16%) $57.47
Current Price
$989.90
Key Data Points
Market Cap
$146B
Day’s Range
$947.00 – $1002.09
52wk Range
$31.01 – $1002.09
Volume
12M
Avg Vol
19M
Gross Margin
34.81%
Sandisk has two primary offerings that affect its AI investment thesis: memory and storage. Both of these components play a key role in its investment thesis. Right now, we’re in a huge memory demand crunch, and several memory providers cannot come close to meeting the demands that cutting-edge AI chips are placing on their hardware. So, as companies like Sandisk race to provide more memory, its solid state drives (SSDs) business is booming. Basically, instead of using increased memory that nobody has access to, AI companies are using SSDs as a location to place more information that can be quickly accessed when needed. The preferred method is to utilize increased memory capacity, but utilizing SSDs from Sandisk is also a great option.
Massive demand for both of Sandisk’s key products has put the company in a strong position and allowed it to deliver 61% year-over-year growth in its latest quarter. What’s even more impressive is its diluted earnings per share, which rose 404% year over year. Because demand for SSDs and memory is soaring, so are the prices of those components, which Sandisk is keeping a cut of for itself. This mechanism allows profits to increase faster than revenue, which is boosting Sandisk’s stock.
However, this all comes at a price. Sandisk’s stock now trades at 20.5 times forward earnings, which may seem like a fairly normal price tag.
SNDK PE Ratio (Forward) data by YCharts
But Sandisk operates in a cyclical business, so once the memory crunch is figured out, the premium price it’s charging will drop, affecting earnings, and crushing its valuation.
Because of that, I think there are far better AI investment options out there than Sandisk. This story has run its course, and a tried-and-true pick like Nvidia (NVDA +4.30%) is still my preferred method. If you’re dead set on picking a company in the memory space, Micron (MU +3.03%) is far cheaper and has a larger market share, making it my stock pick in this niche.
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