SanDisk has taken investors on a wild ride in recent months.
For instance, SanDisk (SNDK) stock is up roughly 2,240% over the past 12 months, a return that turned a sleepy chipmaker into one of the most talked-about stocks on Wall Street.
Then came the drop. The chip stock has fallen 45% from its all-time high, making investors nervous.
So which is it? Is SanDisk a bargain after the pullback, or is this a warning sign that the rally already went too far?
Meanwhile, the company’s own executives have laid out a detailed case for why they believe the story is just getting started.
What sparked SanDisk’s massive rally
SanDisk manufactures NAND flash memory, which is used to store data in phones, laptops, and data center servers. It became an independent public company after splitting from Western Digital in early 2025.
For most of its history, SanDisk was a boring, cyclical business. That changed once artificial intelligence data centers started buying enormous amounts of flash storage.
CEO David Goeckeler explained the shift during a fireside chat at the Mizuho Technology Conference on June 9, 2026, stating:
“Data center has now become, or is quickly becoming, the largest market in NAND.”
Goeckeler added that customer spending forecasts for data centers have been revised higher 14 times in a row.
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Goeckeler has repeatedly pointed to a technical detail that explains the demand surge. As AI models move from training into everyday use, known as inference, they need a place to store huge amounts of temporary data called a KV cache.
He described NAND as uniquely suited for that job. “NAND has always been the most scalable semiconductor technology,” he told the Mizuho audience, adding that as AI systems scale globally, storage naturally becomes a bigger part of the equation.
Speaking at the Bernstein Strategic Decisions Conference on May 28, 2026, Goeckeler put it simply: NAND providers can supply enormous volumes, while more specialized memory like HBM cannot scale the same way.
The bull case for SanDisk stock
Perhaps the bigger shift is how SanDisk now sells its chips. Instead of negotiating prices every quarter, a practice that fueled years of painful cycles, the company has started signing what it calls new business models, or long-term supply agreements.
By the fiscal third quarter, SanDisk had signed five of these deals.
Chief Financial Officer Luis Visoso told analysts at the JPMorgan conference on May 20, 2026, that the three contracts signed that quarter carried a combined minimum purchase commitment of about $42 billion, along with roughly $11 billion in financial guarantees to protect the company if a customer walks away.
Visoso explained the logic behind the guarantees.
“If prices go up, then we would be unhappy because we would not be capturing the upside. If prices go down, our customers would be uncompetitive,” he said, describing why many contracts include a price floor and ceiling instead of a fixed number.
Related: Bank of America revamps Sandisk stock price target
Goeckeler told the JPMorgan audience the company eventually wants more than half of its bit shipments covered by these agreements, up from about a third at the time.
Supporters argue the math is compelling.
- Gross margin reached 78.4% last quarter, and the company has already paid off its remaining term loan debt while building a large net cash position.
- The board also approved a $6 billion stock buyback program.
- Goldman Sachs estimates earnings per share will jump from $168.66 this fiscal year to $249.53 in fiscal 2027.
Goeckeler argues the business is no longer just riding a temporary price spike. “We think we have a tremendous franchise, and we’re very focused on getting the most out of it,” he told the Mizuho audience, pointing to years of committed customer demand as proof the good times can last.
The risks that could make it a trap
The bear case is straightforward. A stock that ran up more than 2,000% in a single year has priced in a lot of good news, and any hint that AI inference needs less flash memory than expected could hit shares hard.
SanDisk also depends heavily on a small number of large customers for its biggest contracts, and NAND pricing has a long history of falling sharply once supply catches up with demand.
Is SanDisk stock undervalued right now
Out of the 17 analysts covering SanDisk stock, 14 recommend “Buy”, and three recommend “Hold”. The average SanDisk stock price target is $2,053, indicating an upside potential of 60% from current levels.
In a research note shared with me, Goldman Sachs’s SanDisk 12-month target price is $2,200.
Investors weighing the pullback should watch two things closely: whether SanDisk keeps signing new long-term agreements, and whether NAND pricing holds up as more supply eventually comes online.
Basically, SanDisk stock is undervalued only if it can consistently beat consensus revenue and earnings estimates going forward.
A key event that will impact SanDisk stock in the near-term is the company’s upcoming earnings call on August 5.
Related: Goldman Sachs sets jaw-dropping SanDisk stock price target for 2026
