The Rally No One Saw Coming: Is It Too Late to Buy SanDisk Stock?

While most AI and tech stocks have taken a hit this month, SanDisk (SNDK) has staged a powerful comeback that’s turning heads across Wall Street. Fueled by explosive demand for high-performance storage required for artificial intelligence workloads, the stock has surged 166% so far this year while many high-valuation AI names have dipped.

Now the question is, is SNDK stock done soaring, or is this breakout just getting started?

AI Is Driving a Structural Shift in NAND

Valued at $98.1 billion, SanDisk makes NAND flash memory and storage products that store data in everything from AI data centers to smartphones. While the memory business is considered cyclical, AI has changed the game. SanDisk’s recent quarter results crushed Wall Street’s expectations with revenue and profits far above forecasts.

In the second quarter of fiscal 2026, SanDisk reported revenue of $3.02 billion, up 61% year-over-year (YoY). Even more impressive was the dramatic increase of 408% in adjusted earnings to $6.2 per share, driven by higher pricing across segments and disciplined cost management. Gross margin expanded to 51.1%. Data center sales increased 64% sequentially to $440 million. SanDisk's technology is being used by hyperscalers, enterprise data centers, OEMs, and system integrators to deploy AI at scale. In its other segments, Edge revenue totaled $1.67 billion, while Consumer revenue increased 39% to $907 million.

Rather than aggressively increasing capital expenditures, SanDisk is maintaining cost discipline. It generated $843 million in adjusted free cash flow. It strengthened its balance sheet by repaying $750 million in debt and ending the quarter with $1.54 billion in cash. Management indicated that demand continues to exceed supply and that the market is becoming increasingly undersupplied, allowing the company considerable pricing power. 

What Fueled the Rally?

SanDisk even expects strong momentum in the coming quarters, which boosted investors' confidence. For the third quarter, revenue is projected to be between $4.4 billion and $4.8 billion, which would mean an increase of 170% at the mid-point. Meanwhile, adjusted earnings per share (EPS) is forecasted to range between $12 and $14, which is a massive step-up from the already strong second quarter and the prior-year quarter EPS of $0.30. Adjusted gross margins are likely to expand further, reaching 65% to 67%.

This eye-catching guidance explains the stock rally. Management stressed that AI infrastructure requires significantly more storage intensity, making NAND flash a critical enabler. SanDisk estimates that data centers will become the largest NAND market for the first time in 2026, owing to hyperscalers and large technology companies investing aggressively in AI infrastructure.

Analysts expect exceptional growth over the next two years. Revenue could increase by 110.6% in fiscal 2026, followed by another 65% in fiscal 2027. Similarly, earnings could rise by a staggering 1,229.7% in fiscal 2026, followed by 103% in fiscal 2027 as the company rebounds from a weak memory cycle. Valued at 16 times forward earnings and six times forward sales, SanDisk is not yet priced like a hyper-growth AI name. The valuation still looks reasonable compared to expected growth. Investors who believe this is the early stage of a multiyear structural shift may find that it is not too late to buy this cheap AI stock.

Is SNDK a Buy, Hold, or Sell on Wall Street?

Overall, Wall Street says SNDK stock is a “Strong Buy.” Of the 21 analysts covering the stock, 14 recommend a “Strong Buy,” one rates it as a “Moderate Buy,” and six suggest holding. Based on an average price target of $700.94, Wall Street anticipates potential upside of around 11% from current levels. The Street-high estimate of $1,000 indicates the stock could gain as much as 59% this year.