Merely put
- SanDisk inventory has risen 3,314% over the previous 12 months, from $32.11 to greater than $1,096, pushed by the worldwide NAND flash scarcity and accelerating AI infrastructure spending.
- In response to SanDisk's monetary outcomes, gross sales for the third quarter of fiscal 2026 reached $5.95 billion, a rise of 251% year-on-year, and gross revenue margin expanded from 22.5% to 78.4% in a single 12 months.
- NAND flash costs are anticipated to rise 60% within the first quarter of 2026 and one other 70-75% within the second quarter, with provide anticipated to stay tight till 2028.
You in all probability know that there will probably be a second when inventory costs begin to outperform Bitcoin on a year-over-year foundation.
SanDisk, publicly traded as SNDK, has soared from $32.11 to greater than $1,096 over the previous 12 months, a rise of three,314%. That's not a typo. The corporate that carried a USB stick in its laptop computer bag is now one of the vital spectacular momentum tales in semiconductor historical past.
Inventory costs are up almost 500% in 2026 alone.
So what occurred? Three issues labored in SanDisk's favor virtually concurrently, and collectively they remodeled the storage firm into an AI infrastructure enterprise.
Nobody totally factored within the spin-off.
SanDisk spent almost a decade buried inside Western Digital. Western Digital accomplished its $19 billion acquisition of SanDisk in Could 2016 with the intention of constructing a storage large that spans each arduous disk drives and NAND flash reminiscence drives. As a substitute, the 2 corporations fought one another for capital for years. Activist buyers led by Elliott Administration finally had sufficient. The board agreed.
On February 24, 2025, SanDisk accomplished its tax-free spinoff from Western Digital and relisted on the Nasdaq underneath its personal ticker. Western Digital shareholders acquired one SNDK share for each three Western Digital shares they owned. This spinoff allowed SanDisk to function as a pure NAND flash firm with out the resistance of arduous disks or reductions from conglomerates.
The timing was virtually ridiculously good. SanDisk went public simply because the NAND business was popping out of one of many worst down cycles in historical past, a interval through which oversupply precipitated NAND costs to plummet by as much as 60% and pushed all main producers into loss territory. From there, the one approach was up.
AI is hungry, NAND is meals
Coaching and operating AI fashions requires extra than simply computing. Requires storage. There are lots of. And constructing AI infrastructure, which NVIDIA CEO Jensen Huang referred to as “the best infrastructure construct in human historical past,” is consuming NAND flash at a tempo the market by no means anticipated.
On-device AI on smartphones and PCs requires more and more massive native storage. As gadgets change into extra succesful, the outcomes they produce additionally are inclined to occupy extra reminiscence. Extra megapixels, greater AI fashions, increased decision AI generations, excessive constancy songs, 4k and even 8k decision films, and extra.
Market analysis agency TrendForce predicts that 128GB Android configurations will disappear by the tip of 2026 as handsets require extra space for native AI processing. Demand shocks hit from all instructions concurrently.
In the meantime, the availability facet was not maintaining. NAND costs are anticipated to rise 60% within the first quarter of 2026 and 234% by the tip of 2026, based on Gartner estimates cited by The Motley Idiot. Provide is predicted to stay constrained till 2028.
AI is inflicting a chip scarcity on a scale just like that attributable to Bitcoin miners a number of years in the past, and even perhaps extra so.
SanDisk is in the course of that worth wave as one of many few corporations with large-scale NAND operations, together with a three way partnership with Japan's Kioxia. In response to SanDisk's SEC filings, gross margin expanded from 22.5% to 78.4% in a single 12 months. This type of growth within the commodity {hardware} enterprise is definitely unprecedented.
numbers should not regular
In response to the corporate's monetary outcomes announcement on April 30, SanDisk's monetary outcomes for the third quarter of 2026 had been a report that restructured analyst fashions. SanDisk stated income was $5.95 billion, “up 97% sequentially and above steering.” Information middle income reached $1.47 billion, a rise of 645% 12 months over 12 months. Non-GAAP EPS was $23.41, in comparison with the consensus estimate of $14.66, based on Investing.com.
CEO David Goeckeler referred to as the outcomes “a basic turning level for SanDisk.”
In response to the identical launch, fourth-quarter steering was for income of $7.75 billion to $8.25 billion and non-GAAP gross margin of 79% to 81%. That's extra income in 1 / 4 than most semiconductor corporations see in a 12 months.
And all the pieces appears to be working in SanDisk's favor.
The corporate eradicated $650 million in long-term debt final quarter, leaving it with zero long-term debt and authorizing a 24/7 Wall Road inventory repurchase program. It then joined the Nasdaq 100 in April to interchange Atlassian, forcing passive index funds to soak up shares into their very own holdings on high of an already parabolic chart.
The corporate additionally has massive, multi-year provide agreements in place with companions it considers “increased worth prospects.”
In earnings name parlance, which means hyperscalers. In different phrases, Nvidia in actual fact SanDisk desires to be a computing supplier within the AI house in actual fact storage supplier. This activity is just not really easy. Nvidia's CUDA know-how has the benefit of locking builders into its ecosystem. Nevertheless, it isn’t not possible to realize.
Dangers price contemplating
Nevertheless, SanDisk's bull market could also be overheating. Its price-to-earnings ratio (PER) is 41 instances, which is nicely above SanDisk's five-year median worth of 15.74 instances. Some merchants could also be rotating earnings from SNDK into different shares, which might be a possible momentum depletion sign. The NAND cycle has been catastrophically unsuitable in each instructions, probably main to produce development and a slowdown in AI capital funding.
Google has dedicated to spending as much as $185 billion on AI infrastructure in 2026 alone. In response to CNBC, Meta straight cited rising reminiscence costs as the principle driver of elevated capex steering, whereas Microsoft attributed about $25 billion of its $190 billion in capex in 2026 to increased element prices. The momentum of hyperscalers is just not slowing down.
Sandisk is backed by the BiCS8 3D NAND structure with a long-term Kioxia three way partnership, 5 multi-year buyer provide agreements with over $11 billion in monetary ensures, and a roadmap focusing on AI inference reminiscence bottlenecks, making it one of many cleanest NAND/Flash pure performs on the reminiscence facet of AI buying and selling.
Fourth-quarter income steering of $7.75 billion to $8.25 billion means an annual run fee of greater than $30 billion, outstanding for an organization that re-entered public buying and selling a 12 months in the past at about $10 a share.
Disclaimer
The views and opinions expressed by the authors are for informational functions solely and don’t represent monetary, funding, or different recommendation.
