Sandisk has delivered one of 2026’s most dramatic stock moves, but the bigger story is that the rally may still have room to run. The stock is up about 635% year to date, even after a sharp pullback from an 884% peak tied to the recent AI-related selloff.
That surge did not come from hype alone. It was driven by a real shift in the memory market, where demand for NAND used in solid-state drives has been pushed higher by data center spending on AI infrastructure.
A supply crunch changed the story
Sandisk makes NAND memory, which is used to store data across a wide range of computing devices. More recently, a major jump in SSD usage inside data centers has helped turn NAND into a far hotter product than it used to be.
AI software needs huge amounts of data for training, and it also needs fast access to earlier chat results and other information during inference. That has increased demand for SSD-based storage, and supply has not kept up.
| Key Market Shift | What It Means for Sandisk | Source Detail |
|---|---|---|
| Higher SSD demand in data centers | More NAND sales at better prices | AI data storage and access needs are rising |
| Tight market conditions | Industry pricing power has improved | Supply is still below demand |
| Stronger earnings outlook | Valuation has reset from extreme levels | Forward earnings multiples have moved sharply |
As prices rose, Sandisk’s revenue and earnings improved quickly. Before the demand spike, the stock had been treated like a boring cyclical name, and its valuation was just 0.6 times forward earnings at this time last year.
That valuation expanded dramatically as the growth story gained credibility, reaching more than 35 times forward earnings at one point. It has since fallen back to 9.3 times forward earnings, in part because Sandisk’s fiscal 2027 began on July 1 and the new valuation reflects higher earnings projections.
Why the market may not be done with this trade
The key question now is how long the memory shortage can last. According to Micron, companies expect tight market conditions to persist beyond calendar 2027, which supports the idea that Sandisk’s earnings power may stay elevated for a while.
That matters because the stock’s current valuation is no longer as stretched as it was at its peak. If demand keeps outrunning supply, Sandisk could continue to benefit from pricing strength while data center build-outs remain active.
For investors, the stock’s massive gain may look like the end of the move, but the operating backdrop suggests otherwise. Sandisk is now sitting on a much cheaper multiple than before, while the demand imbalance that pushed the stock higher still appears to be in place.