Core Viewpoint - Sandisk has experienced a significant stock increase due to high demand for artificial intelligence infrastructure, leading to a supply shortage in memory chips and storage devices, with a total return of 1,500% since its spin-off from Western Digital [1] Company Performance - Sandisk's stock price increased more than sixfold in 2025 and has more than doubled in 2026, currently trading at $576 per share [1][2] - The company reported a 61% revenue increase to $3 billion in Q2 fiscal 2026, driven by strong sales in the data center segment, and non-GAAP earnings surged 404% to $6.20 per diluted share [9] - Management's guidance for Q3 estimates revenue of $4.6 billion and non-GAAP net income of $13.00 per diluted share, indicating a potential doubling of earnings compared to the previous quarter [10] Market Position - Sandisk is the fifth-largest player in the NAND flash memory market and gained 2 percentage points of market share over the past year, while competitors like Samsung and SK Hynix lost market share [6] - The company benefits from a joint venture with Kioxia, allowing for cost efficiencies and supply chain security through shared R&D and capital expenditures [4] Valuation and Analyst Sentiment - Analysts have raised their target prices for Sandisk following exceptional earnings, with a median target price of $690 per share implying a 20% upside, while the highest target price suggests a 73% upside [3][7] - Wall Street estimates Sandisk's adjusted earnings will grow at 156% annually through the fiscal year ending in June 2027, making the current valuation of 80 times earnings appear reasonable [11] Industry Context - The semiconductor industry is cyclical, with potential for market oscillation between supply shortages and gluts, which could affect Sandisk's future valuation [12]
Sandisk Stock Is Up 1,500% in the Past Year Due to AI -- Is It Still a Buy? Wall Street Has a Surprising Answer for Investors.