After being spun off from Western Digital in February 2025 at a market capitalization of $5 billion, Sandisk has emerged as the top performer in the S&P 500. The stock more than doubled in value within its first month back on the public markets and closed 2025 up roughly 1,000 percent. So far in 2026, shares have again more than doubled year to date through January 21, driving the company’s market cap to approximately $69 billion. This dramatic ascent highlights the difficulty of timing entries and exits, as investors who recognized Sandisk’s revival early have seen outsized gains, while those on the sidelines risk missing further upside.

Sandisk’s profitability surge is being fueled by unprecedented demand for solid-state memory in data centers supporting AI workloads. Management projects total shipped memory capacity to more than double between the end of 2025 and the end of 2029. Gross margins have expanded to just over 29 percent as tight supply has allowed Sandisk to raise average selling prices. Data center revenue, which accounted for roughly 12 percent of total sales in the latest quarter, is forecast to become the company’s largest growth driver, with hyperscale operators expected to invest hundreds of billions in AI infrastructure over the next several years.

Sandisk now trades at around 31 times its projected earnings for the next twelve months, placing it between high-multiple AI hardware peers and more established tech names. While this multiple may appear rich, it remains below some semiconductor leaders trading above 40 times consensus estimates. Analysts have raised profit forecasts repeatedly over the past several months, yet uncertainty persists over just how far cash flows can climb and how long the supply squeeze will last. For investors, this underscores the importance of building positions gradually—such as through dollar-cost averaging—to participate in high-quality companies poised to benefit from secular AI trends while managing the risk of forecasting errors.