Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTLeo Sun, The Motley FoolWed, June 24, 2026 at 6:22 PM GMT+2 3 min readSandisk (NASDAQ: SNDK), one of the world's largest flash memory chipmakers, was once considered a cyclical stock in a commoditized market. But since its spin-off from Western Digital (NASDAQ: WDC) last February, its stock has surged more than 5,200%.In 2026 alone, Sandisk's stock has rallied more than 720%. Should investors chase that rally, or should they wait for its stock to cool off? Let's review its growth rates and valuations to decide.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: Getty Images.Why did Sandisk's stock soar?When Western Digital spun off Sandisk, it was still a slow-growth maker of NAND flash memory chips, which are used in solid-state drives (SSDs), USB drives, and SD cards. However, the artificial intelligence (AI) market's explosive growth forced data centers to upgrade their servers with faster SSDs.That buying frenzy triggered a global NAND memory chip shortage and drove up Sandisk's chip prices, boosting its revenue and margins. Sandisk further capitalized on the AI boom by launching the world's first 256TB enterprise SSD for AI data lakes. Those ultra-dense drives enabled hyperscalers to consolidate dozens of hardware server racks into a single unit.Without Western Digital, which was struggling to sell its older platter-based hard-disk drives (HDDs), Sandisk became a "pure play" on the NAND market. In fiscal 2025 (which ended last July), Sandisk's revenue grew 10%, its adjusted gross margin expanded from 14.8% to 30.3%, and it returned to profitability on a non-GAAP (generally accepted accounting principles) basis.But in fiscal 2026, analysts expect Sandisk's revenue and non-GAAP EPS to surge 167% and 2,089%, respectively, as those AI tailwinds accelerate. In fiscal 2027, they expect the company's revenue and non-GAAP EPS to rise 122% and 180%, respectively.That growth should be driven by its increased sales of 256TB SSDs to hyperscalers, the development of even denser chips, and multi-year cloud contracts that will generate predictable recurring revenues and insulate it from future memory market crashes.But should you buy Sandisk's stock today?At $1,920 per share, Sandisk trades at just 10 times and 11 times next year's non-GAAP and GAAP EPS estimates, respectively. So even though Sandisk's stock has skyrocketed since its spin-off from Western Digital, it's still being valued as a slow-growth maker of legacy memory chips rather than a high-growth AI chipmaker. If that rerating occurs, Sandisk's stock could easily double or triple from its current levels -- so it still looks like a worthwhile investment.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info