SanDisk found itself in the right place at the right time.
While the artificial intelligence (AI) hype continues and the “Magnificent Seven” stocks get a lot of attention, one stock seems to be getting less attention. sandisk (SNDK 5.88%).
Since its spin-off from western digital SanDisk stock has been performing well since its second appearance on the stock market in February 2025. It’s up nearly 1,030% over the past 11 months. S&P500‘s best-performing stocks in 2025.
Image source: Getty Images.
Why did SanDisk stock soar?
By spinning off Western Digital, SanDisk was able to double its core storage device business. The company makes devices that store and retrieve large amounts of data very quickly. This aligns well with how AI infrastructure is built today, as data centers require huge amounts of storage.
The more complex AI becomes, the more data it needs to store and use, and the more fast storage devices it requires. Unfortunately for companies building data centers, the supply of these storage devices is not keeping up with demand. Fortunately for SanDisk, this lack of supply allowed it to raise prices and meet its cash target six months ahead of its target date.
Although data center revenue still represents only about 12% of SanDisk’s total revenue, it is likely to be the company’s biggest growth driver in the coming years. Many hyperscalers (such as major cloud providers) are expected to spend hundreds of billions of dollars in total over the next few years.
Of course, all these billions won’t flow to SanDisk, but as a key part of the pipeline, SanDisk could benefit considerably from this spending.
Today’s changes
(-5.88%) $-29.61
current price
$473.83
Key data points
Market capitalization
$74 billion
daily range
$463.01 – $506.30
52 week range
$27.89 – $509.50
volume
21M
average volume
13M
gross profit
29.33%
Should I buy SanDisk at the beginning of the year?
When stock prices soar by more than 1,000% in a short period of time, it is natural for investors to be hesitant to invest for fear of a correction or sudden decline. The SanDisk situation is no different.
SanDisk currently trades at 30.8 times next year’s expected earnings, which most analysts would consider expensive. Not as expensive as AI hardware companies would like Nvidia (39.7) and intel (78.2), but it is more expensive than high-tech products such as: alphabet (29.3) and microsoft (28.3).
That said, many factors are working in SanDisk’s favor at this point. I wouldn’t invest a lump sum in the company, but dollar-cost averaging, which slowly and steadily increases the shares, might be a good approach. The company’s business is well-positioned to maintain momentum, but long-term growth will depend on whether AI demand remains strong.
Stefon Walters has a position at Microsoft. The Motley Fool has positions in and recommends Alphabet, Intel, Microsoft, Nvidia, and Western Digital. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
