It’s been a while since I heard references to the Magnificent Seven tech stocks. These days we just talk about AI and how this is creating wild outcomes for share prices and supply chains alike.
But here’s perhaps the craziest performance of all: in the past year, SanDisk Corp is up 1,500%. No, that isn’t a typo with an extra zero. And yes, this is the brand you’re thinking of that makes portable memory.
What on earth is going on?
First, this move needs to be interpreted in the context of the volatile and frothy market we find ourselves in. Any company that looks like it could benefit from AI is capable of delivering life-changing returns over a short period. It’s worth remembering that those returns can evaporate as quickly as they arrived.
A good example is Oracle, by no means an unknown start-up or an obscure name that has just burst onto the scene. The company has been around for nearly 50 years, yet a concerted effort to drive the AI narrative (and distract the market from the anaemic performance in the software business) helped the share price triple from its 52-week lows last year. There was even an investor day in Las Vegas in October 2025 to try to support the inflated share price.
But as the market swung from greed to fear in AI stocks and began to ask the real questions about funding and execution risk, Oracle’s stock was left with a hangover worthy of a weekend in Vegas. At the time of writing the share price was at $165 and heading lower, after peaking at more than $345! The faster they rise, the harder they can fall.
This is a dangerous environment for investors and traders to be chasing stocks with unjustified momentum. Treat Oracle as a cautionary tale for SanDisk (and anything else with a share price chart that looks like this) as we dig into the financial performance that is getting the market all hot under the collar.
Based on a chart reflecting a 1,500% return over a year, you would expect to see unbelievably strong financials. Instead, what you’ll find is a flat revenue story over a decade, followed by a meaty upswing in only the past two quarters. The latest quarter reflected year-on-year revenue growth of more than 60%. That’s great, but it certainly doesn’t explain a share price move of this magnitude.
The faster they rise, the harder they can fall
As always, it’s all about the forward-looking story, with the company using every buzzword you can imagine regarding AI and the “step change” it is driving. The critical involvement of SanDisk in this supply chain lies in the use of Nand memory, a type of nonvolatile storage technology that retains data even when the power is off. This is a very important way to store data rather than process it, making it great for data centres.
In other words: no, you’re not losing your mind; this stock isn’t 16 times higher than a year ago because people are suddenly obsessed with digital cameras and portable memory, or because SanDisk’s cute partnerships with brands like Crayola and the Fifa World Cup are driving a huge uptick in sales. This share price growth is based entirely on the market’s extrapolation of the current data centre growth rates and its search for new ways in the value chain to play this theme.
The investment thesis for SanDisk is similar to what we are seeing at giants such as Taiwan Semiconductor Manufacturing Co and Nvidia. The market believes that demand for chips (and now memory) has transitioned from cyclical to secular. Instead of it relying on consumer electronics and gaming, the driver is now vast enterprise budgets and no sign of things slowing down.
This isn’t just driving higher prices in specialist products; it is making everything more expensive in electronics and computing. This in turn drives a pull-forward of demand and thus even stronger sales that worsen near-term supply shortages. And so the cycle continues until the level of supply matches demand and things return to normal.
With data centres expected to become the largest market for Nand in 2026, the market is betting it will take a long time until the supply-demand dynamics normalise. The midpoint for sales guidance for the next quarter is $4.6bn, up 53% sequentially and more than 170% year on year.
On a trailing sales multiple of 9.5 and a trailing enterprise value/ebitda multiple of 59, SanDisk has big shoes to grow into. Compared with Nvidia’s sales multiple of 24.8, though, SanDisk looks like a relative bargain. And at these growth rates, it’s the forward multiples that really matter. This one might not be out of gas yet.
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