Amid the ongoing frenzy around artificial intelligence and while the “Magnificent Seven” in U.S. stocks hog the spotlight, one stock appears to be quietly charting its own independent course: SanDisk (SNDK).
Since spinning off from Western Digital and relisting in February 2025, SanDisk’s stock price has surged ahead. Over the past 11 months, it has accumulated a gain of approximately 1030%, making it the best-performing stock in the S&P 500 for 2025.
By spinning off from Western Digital, SanDisk has been able to fully focus on its core data storage device business. The company produces devices capable of storing and reading massive amounts of data at high speeds, which perfectly aligns with the current demand for AI infrastructure—data centers are in desperate need of large quantities of storage devices.
The more complex AI becomes, the more data it requires for storage and usage, and the greater the need for high-speed storage devices. For companies building data centers, the supply shortage of storage devices is a challenge; but for SanDisk, this shortage has allowed it to raise prices and achieve its cash target six months ahead of schedule.
Currently, the data center business accounts for only about 12% of SanDisk’s total revenue, but it is likely to become its largest growth driver in the coming years. Hyperscale cloud service providers are expected to invest hundreds of billions of dollars over the next few years. While not all of this capital will flow to SanDisk, as a key player in the industry chain, the company stands to benefit significantly.
After any stock skyrockets by over 1000% in a short period, investors naturally hesitate about investing, fearing the risk of a pullback or a steep decline. SanDisk is no exception.
SanDisk’s current forward price-to-earnings ratio, based on next year’s expected earnings, is 30.8 times. Most analysts consider this valuation on the high side. Although it is lower than AI hardware companies like NVIDIA (39.7 times) and Intel (78.2 times), it is higher than tech giants such as Alphabet (29.3 times) and Microsoft (28.3 times).
Nevertheless, SanDisk currently enjoys several favorable factors. Making a large, one-time investment may not be the best strategy, but gradually building a position through regular, fixed-amount investments could be a prudent approach. The company’s business is expected to maintain its growth momentum, but its long-term performance will still depend on whether AI demand remains robust.
