Key Points
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A $1,000 investment made at Sandisk's Sept. 9, 2025, close is worth about $23,200 as of this writing.
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Fiscal 2026 revenue rose 175% year over year to $20.25 billion as memory prices surged.
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Based on analysts' fiscal 2027 estimates, shares trade at about 7 times earnings.
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A year ago, Sandisk (NASDAQ:SNDK) was one of the market's afterthoughts. Shares of the flash-memory specialist closed at $70.51 on Sept. 9, 2025, valuing the whole company near $10 billion.
As of this writing, the stock trades near $1,630. A $1,000 investment at that September close would be worth about $23,200 today.
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The payoff is bigger than the headline promises, and the gap is deliberate. A 52-week low is a rolling anchor, and the September 2025 bottom has been falling out of the trailing-year window in recent days.
Measure instead from the cheapest day still inside that window (Sept. 15, 2025, when shares traded as low as $85.12) and the same $1,000 becomes about $19,200. Either way, it was a remarkable year, and one I wouldn't bet on repeating.
Priced for a bust
Last September, investors were looking at a company fresh off a miserable year. Sandisk's latest report at the time covered the fourth quarter of fiscal 2025 (the period ended June 27, 2025). It showed a $23 million net loss on $1.9 billion of revenue, with gross margin at 26.2%.
Full-year revenue came to just $7.4 billion. And the company was only months removed from its February 2025 spinoff from Western Digital.
At $70.51, the stock changed hands at about 1.4 times trailing sales.
Buying it wasn't a bet on a great business. It was a bet that flash-memory prices would stop falling.
The sales multiple grew faster than sales did
Memory prices did far more than stop falling. Demand from artificial intelligence data centers ran into tight supply, and prices for NAND flash (the storage chips Sandisk sells) surged. Research firm TrendForce expected contract prices to jump 70% to 75% during the second calendar quarter of 2026 alone.
Sandisk's results followed. Quarterly revenue went from $1.9 billion a year earlier to $5.95 billion in the third quarter of fiscal 2026 to $8.97 billion in the fiscal fourth quarter (ended July 3, 2026), with gross margin climbing from 26.2% to 78.4% to 84.6% across the same stretch. Sandisk said about two-thirds of the fiscal fourth quarter's 51% sequential revenue growth came from higher pricing. For the full year, revenue rose 175% year over year to $20.25 billion, with data center revenue up 437% year over year. And net income reached $11.4 billion, including $6.9 billion in the final quarter.
In other words, Sandisk earned about two-thirds of its entire September 2025 market value in a single quarter.
Still, the business explains only part of a stock that rose about 23-fold.
Revenue nearly tripled across the window, while the price the market put on each dollar of that revenue rose more than eightfold, from about 1.4 times trailing sales to about 12 times trailing sales. That repricing, I'd argue, accounted for most of the gain.
Could it happen again?
Run the math forward and the answer comes quickly. Another 23-fold move would take Sandisk from a market value near $239 billion today to one near $5.5 trillion. No one is arguing for that.
The pricing engine is also slowing. TrendForce sees NAND flash contract prices rising just 10% to 15% in the current quarter, a noticeably slower pace. Prices are at record highs, and consumer demand may be stretched.
Sandisk's own guidance points the same way, calling for revenue of $10.3 billion to $10.8 billion in the fiscal first quarter of 2027 -- up about 18% sequentially at the midpoint. That implies a clear deceleration from the fiscal fourth quarter's 51% jump. And guidance puts non-GAAP (adjusted) gross margin at 83% to 85%, holding at a high level instead of climbing.
Of course, the stock's valuation already assumes plenty of cooling. Shares now cost about 7 times the earnings the company is expected to deliver in fiscal 2027 -- arguably the market's way of betting that today's memory prices won't hold. CEO David Goeckeler sees it differently. In the fiscal fourth-quarter earnings release, he said Sandisk is positioned to "generate growing and durable free cash flow."
More index-fund buying is likely on the way, too: S&P Dow Jones Indices said on Sept. 4 that Sandisk will join the S&P 100 on Sept. 21.
Ultimately, though, I don't expect the next year to look anything like the last one. The 23-fold payoff came mostly from where the stock started. Sandisk was priced for a bust, right before memory prices surged. Today, the company is in far better shape -- and shares could still do fine from here if pricing holds. But the setup that turned $1,000 into more than $20,000 is gone, and I personally don't find shares attractive here.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool has a disclosure policy.