Sandisk: A Memory, and a Gamble

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Investor looking at charts

Sandisk, a name that used to mean flash drives at the drugstore, is now something else entirely. A rocket, really. The stock has gone up, oh, about 1,500% since it was spun off from Western Digital last February. A nice return, if you happened to be holding. So it goes.

Wall Street, naturally, is trying to figure it all out. They see a company worth buying, but they also see…well, they see numbers. As of January 30th, the stock was trading at $576 a share. The high-end analysts think it could hit $1,000. Optimistic souls. The low end? $235. A 59% downside. They’re hedging their bets, those analysts. Smart, in a way. Though, what do they know?

  • Highest target price: $1,000 (73% upside)
  • Median target price: $690 (20% upside)
  • Lowest target price: $235 (59% downside)

They raised their targets after Sandisk reported earnings. Earnings, earnings. As if numbers tell the whole story. The median had been $400. Now it’s higher. Wall Street is playing catch-up with a train that’s already left the station. Is it too late to jump on? That’s the question, isn’t it?

Sandisk Makes Things People Forget

Sandisk makes memory. Flash memory, mostly. Little chips that hold the photos of your grandchildren, the embarrassing videos you took on vacation, the things you’d rather forget. They put it in everything: computers, phones, cars. And now, data centers. Those big, humming buildings full of information. It’s a good business, memory. People always need more of it. Or, at least, they think they do.

They have a deal with Kioxia, a Japanese company. Sharing research and development, splitting the costs. Sensible. It’s good to have a friend when you’re building something complicated. They make the wafers, the little slices of silicon, and then they turn them into chips. They do it all themselves, which is rare these days. Vertical integration, they call it. It means they control the process. Which means they can make things better. Or, at least, they think they can.

Sandisk is number five in the flash memory market. Not a leader, but they’re gaining ground. They’ve picked up two percentage points of market share in the last year. Samsung and SK Hynix are losing share. The big guys stumble, and Sandisk picks up the pieces. Several hyperscalers – those massive data centers – are testing their SSDs. That’s a good sign. Or, it could be nothing.

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A Shortage, and a Blessing

There’s a shortage of memory chips. Demand for artificial intelligence is through the roof, and nobody can make enough chips to keep up. Prices went up 50% last quarter, and they’re expected to go up another 40-50% this quarter. A crisis for some, an opportunity for Sandisk. So it goes.

Sandisk reported revenue of $3 billion in the last quarter, up 61%. Earnings were up 404%, to $6.20 a share. Numbers, numbers. They’re calling for $4.6 billion in revenue next quarter, and $13.00 a share in earnings. If that happens, earnings will double. The CEO says demand is well above supply, and will be for a while. He’s probably right. Or, he’s just saying what investors want to hear.

A Gamble, Like All Gambles

Wall Street thinks Sandisk’s earnings will grow 156% a year through 2027. That makes the current valuation of 80 times earnings seem…reasonable. Which is a funny thing to say about a stock. It’s an argument for buying, if you’re the optimistic type. But this is the semiconductor business. It goes in cycles. Shortages turn into gluts. Prices go up, then they come crashing down. So it goes.

At some point, the market will realize this. Investors will start to worry about the future. The price-to-earnings multiple will come down. Sandisk’s stock could fall sharply. It’s impossible to predict when. It could be next month, or it could be a year from now. But it will happen. If you’re comfortable with that risk, you can buy a small position. If not, there are other things to worry about. There always are.

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2026-02-01 11:35