Sandisk: A Most Peculiar Bloom

by

The current infatuation with artificial intelligence is, shall we say, rather vulgar. Everyone rushes toward the obvious beneficiaries – the Nvidias and the Intels – while overlooking the quiet enablers. It is in this neglected corner that one finds, occasionally, a genuine opportunity. Sandisk (SNDK 5.88%), recently sprung from the rather pedestrian Western Digital, is such a case. A bloom, if you will, in a garden overrun with garish displays.

A rise of nearly 1,030% in eleven months is, admittedly, a rather startling figure. Most investors, alas, are driven by herd instinct and will likely mistake such exuberance for a bubble. They are, of course, perfectly entitled to their errors. It was the S&P 500’s best performer in 2025, a fact I mention not to encourage further frenzy, but merely to observe the irony. The masses reward success by overpaying for it.

The Art of Quiet Profit

Spinning off from Western Digital allowed Sandisk to focus, a rare virtue in this age of diversification. They create devices that store and retrieve data with a speed that is, frankly, essential to the current AI mania. Data centers, those vast cathedrals of computation, require prodigious amounts of storage. It is a simple equation, really: more intelligence requires more memory.

The more complex these artificial minds become, the more voracious their appetite for data. And, crucially, the supply of these high-speed storage devices has failed to keep pace. A shortage, you see, is a far more potent force than innovation. It allows Sandisk to dictate terms, a position of exquisite power. They reached their cash goals six months early, a delightful demonstration of market leverage.

Currently, data centers account for a mere 12% of Sandisk’s revenue, a modest figure. But it is the seed from which a substantial fortune will grow. Hyperscalers, those cloud providers who dream of omniscience, are expected to spend hundreds of billions in the coming years. Not all of this wealth will flow to Sandisk, naturally. But a significant portion will, and that is sufficient.

Loading widget...

A Most Unfashionable Price?

A stock that has ascended so dramatically will inevitably attract skepticism. And rightly so. One should never trust a market that rewards such obvious success. Sandisk currently trades at 30.8 times its projected earnings. Expensive? Perhaps. But then, so is good taste. It is less extravagant than Nvidia (39.7) or Intel (78.2), and roughly in line with the pedestrian valuations of Alphabet and Microsoft.

I wouldn’t advocate a reckless plunge, naturally. A lump sum investment is the mark of a barbarian. Dollar-cost averaging – a slow, deliberate accumulation – is far more civilized. Sandisk is well-positioned to maintain its momentum, provided the AI frenzy continues. And if it doesn’t? Well, one must always be prepared for disappointment. The market, after all, is a cruel mistress.

Read More

2026-01-24 03:32