Sandisk Stock Is Up 720% in 2026. Is the Rally Still Worth Chasing?

Sandisk (NASDAQ: SNDK), 1 of the world's largest flash representation chipmakers, was erstwhile considered a cyclical banal successful a commoditized market. But since its spin-off from Western Digital (NASDAQ: WDC) past February, its banal has surged much than 5,200%.

In 2026 alone, Sandisk's banal has rallied much than 720%. Should investors pursuit that rally, oregon should they hold for its banal to chill off? Let's reappraisal its maturation rates and valuations to decide.

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Why did Sandisk's banal soar?

When Western Digital spun disconnected Sandisk, it was inactive a slow-growth shaper of NAND flash representation chips, which are utilized successful solid-state drives (SSDs), USB drives, and SD cards. However, the artificial quality (AI) market's explosive maturation forced information centers to upgrade their servers with faster SSDs.

That buying frenzy triggered a planetary NAND representation spot shortage and drove up Sandisk's spot prices, boosting its gross and margins. Sandisk further capitalized connected the AI roar by launching the world's archetypal 256TB endeavor SSD for AI information lakes. Those ultra-dense drives enabled hyperscalers to consolidate dozens of hardware server racks into a azygous unit.

Without Western Digital, which was struggling to merchantability its older platter-based hard-disk drives (HDDs), Sandisk became a "pure play" connected the NAND market. In fiscal 2025 (which ended past July), Sandisk's gross grew 10%, its adjusted gross borderline expanded from 14.8% to 30.3%, and it returned to profitability connected a non-GAAP (generally accepted accounting principles) basis.

But successful fiscal 2026, analysts expect Sandisk's gross and non-GAAP EPS to surge 167% and 2,089%, respectively, arsenic those AI tailwinds accelerate. In fiscal 2027, they expect the company's gross and non-GAAP EPS to emergence 122% and 180%, respectively.

That maturation should beryllium driven by its accrued income of 256TB SSDs to hyperscalers, the improvement of adjacent denser chips, and multi-year unreality contracts that volition make predictable recurring revenues and insulate it from aboriginal representation marketplace crashes.

But should you bargain Sandisk's banal today?

At $1,920 per share, Sandisk trades astatine conscionable 10 times and 11 times adjacent year's non-GAAP and GAAP EPS estimates, respectively. So adjacent though Sandisk's banal has skyrocketed since its spin-off from Western Digital, it's inactive being valued arsenic a slow-growth shaper of bequest representation chips alternatively than a high-growth AI chipmaker. If that rerating occurs, Sandisk's banal could easy treble oregon triple from its existent levels -- truthful it inactive looks similar a worthwhile investment.