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SanDisk (NASDAQ: SNDK) is the best-performing S&P 500 inventory over the past yr. Consider it or not, it’s up greater than 3,500%.
May it double once more from right here? Let’s talk about.
Taking advantage of the reminiscence growth
SanDisk is a reminiscence firm. And demand for reminiscence is off the charts in the meanwhile because of the truth that it’s an vital part in generative AI programs.
Given this excessive stage of demand, SanDisk is seeing prolific development at current. Check out these numbers from its latest fourth-quarter FY26 earnings:
- Income of $8.97bn, up 372% yr on yr.
- Non-GAAP internet earnings of $6,162m versus $42m a yr earlier.
- Earnings per share of $39.25, up from $0.29 in This autumn 2025.
- Gross margin of 84.6% versus 78.4% within the earlier quarter.
Lengthy-term contracts with prospects
Now, reminiscence has traditionally been a really cyclical business. What I imply by that is that it has had booms and busts.
However issues may very well be altering. As a result of reminiscence corporations are signing long-term contracts with consumers right this moment.
In its This autumn earnings, SanDisk stated that it now has ‘New Enterprise Mannequin’ (NBM) agreements with eight information centre and edge prospects. The weighted common period of those NBMs is over 4 years which means that demand for its reminiscence merchandise isn’t out of the blue going to fall off a cliff tomorrow.
Gross margins for these NBMs is anticipated to be round 80%. In different phrases, they’re very worthwhile offers for the corporate.
Fiscal yr 2026 was the yr Sandisk redefined what this franchise might be. We delivered report monetary outcomes, established information centre as a significant pillar of development, secured our manufacturing and provide base by means of the following decade, and basically restructured how we transact with our largest prospects.
SanDisk CEO David Goeckeler
Can it double?
So the corporate clearly has momentum proper now and the longer term appears to be like brilliant. However as I requested earlier, can the inventory double after that huge rise over the past 12 months?
Nicely, I wouldn’t rule out a doubling within the share value from right here as a result of the corporate’s valuation continues to be low – the forward-looking price-to-earnings (P/E) ratio is simply 7.5.
We may doubtlessly see a state of affairs the place traders really feel comfy awarding SanDisk a a lot greater valuation now that it has long-term contracts with eight prospects. If the P/E ratio had been to rise to fifteen (nonetheless fairly low relative to the expansion), we’d get a doubling of the share value, assuming earnings per share (EPS) don’t fall.
It’s value noting right here that the corporate is shopping for again a ton of shares. This could assist to spice up EPS.
What do analysts assume?
I’ll level out that the common analyst 12-month value goal right this moment is simply $1,984. That’s simply 24% above the present share value which means that the consensus view is that the inventory received’t double.
Having stated that, some analyst corporations have a lot greater value targets. For instance, Bernstein SocGen has a goal of $3,000, which isn’t that far off a double from right here.
Ought to I purchase?
As for whether or not I’ll purchase SanDisk for my portfolio, I’m undecided at this stage. I do assume the inventory appears to be like attention-grabbing given its valuation. Nonetheless, I already maintain a number of different reminiscence shares.
There are additionally dangers round slowing development as pricing energy could drop off. So, for now, I’m going to maintain it on my watchlist.
Must you make investments £5,000 in Sandisk proper now?
When investing professional Mark Rogers and his workforce have a inventory tip, it might pay to hear. In spite of everything, the flagship Twelfth Magpie Share Advisor publication he has run for almost a decade has offered hundreds of paying members with prime inventory suggestions from the UK and US markets.
And proper now, Mark thinks there are 6 standout shares that traders ought to take into account shopping for. Wish to see if Sandisk made the checklist?
Edward Sheldon doesn’t maintain any positions within the corporations talked about.
