Less than a year after being spun off from Western Digital, NAND flash memory specialist Sandisk (SNDK) has become one of the market’s hottest semiconductor plays. Since its standalone debut, the company—which provides storage solutions for smartphones, PCs, data centers, and more—has seen its shares skyrocket by an eye-popping 1,400%.
After such a blistering rally, investors are naturally wondering: Is it too late to buy, or could there be even more upside ahead? A closer look at the fundamentals suggests Sandisk’s growth story is just getting started—and the stock could potentially quadruple again over the next three years.
Sandisk’s meteoric rise isn’t just hype. In its January earnings report for the quarter ended Jan. 2, the company delivered adjusted earnings per share of $6.20, crushing the analyst consensus of $3.62. Revenue hit $3.03 billion, also far exceeding expectations of $2.69 billion. The stellar results provided fresh fuel for the stock’s momentum.
The primary driver behind this outperformance is the surging demand for artificial intelligence (AI) applications, which require massive amounts of high-performance storage.
Beyond strong demand, favorable supply dynamics are also boosting Sandisk’s prospects. TrendForce, a market research firm, expects NAND flash prices to jump 55% to 60% in the current quarter—significantly higher than earlier estimates. Moreover, supply is projected to remain tight through 2028, as demand is expected to nearly triple from 2024 levels by then.
This combination of rising prices and volume growth is reflected in earnings forecasts. Analysts project Sandisk’s earnings per share to skyrocket 1,220% this fiscal year to $39.45, and nearly double again in the following year.
Even after its massive rally, Sandisk trades at just 15 times forward earnings—a relatively modest valuation compared to many other AI-fueled chip stocks.
Using a conservative estimate of 25% earnings growth in fiscal 2028 (bringing EPS to roughly $95) and applying the Nasdaq-100’s forward P/E multiple of 25, Sandisk’s stock price could reach $2,375. That would represent a more than fourfold increase from current levels, implying the stock could still become a multibagger over the next three years.
While the long-term outlook is compelling, analysts also urge caution. Stocks that rally this hard this fast are susceptible to sharp pullbacks. If investor sentiment toward the tech sector cools or concerns about AI-related spending intensify, Sandisk’s shares could tumble. For those with a low risk tolerance, waiting on the sidelines might be prudent.
Sandisk has established itself as a key player in the AI-driven storage market, with robust earnings growth, favorable supply tailwinds, and a valuation that still offers upside. For investors willing to ride out volatility, this red-hot chip stock may just be getting started.
