Key Points
Sandisk has jumped more than 1,000% over the last six months.
It continues to benefit from tight supply in the memory sector.
Some investors are skeptical of its ability to build a sustainable business.
Sandisk (NASDAQ: SNDK) has been one of the top-performing stocks of the last six months, but its blistering growth slowed down in February.
Still, the flash memory-chip maker managed to tack on another double-digit gain, up 10%, according to data from S&P Global Market Intelligence.
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There was no major news out on Sandisk last month, but the stock fluctuated with the broader memory and AI sectors.
The company announced a secondary stock offering, though that won't bring in any money for the company as those shares were owned by Western Digital.
As you can see from the chart below, the stock didn't have any real pattern over the month, but still managed to finish with solid gains.
The memory boom continues
Memory stocks have soared in recent months due to a shortage in the key chips from AI demand, and Sandisk has been the biggest winner lately, up more than 1,000% over the last six months in part because it's much smaller than industry leaders like Micron.
In addition to the successful stock offering, CEO David Goeckeler said at an investor conference toward the end of the month that the company is focused on long-term supply agreements with data center customers.
Doing so will help leverage the current surge in demand for long-term stability as the memory subsector is notoriously cyclical.
Analysts expect strong growth at the company, forecasting revenue to more than double to $15.5 billion and for earnings per share to jump to $39.84 in fiscal 2026, meaning the stock still trades at a forward price-to-earnings ratio of less than 16.
Image source: Getty Images.
What's next for Sandisk
There's still a lot of uncertainty for Sandisk, even though reports show supply continuing to tighten in the memory market.
However, the company is facing some adversity as Citron Research said it was short the stock, arguing that SanDisk sells a commodity product and that the memory market is cyclical. Investors also seemed unimpressed with the company's announcement about an upgrade to its solid-state memory drive.
Sandisk has only been public for a year, as it was spun off from Western Digital, so its business is much less established than the memory leaders.
The company should continue to benefit from the tight supply dynamics in memory, but it's an open question of whether the company can transition to a more sustainable product lineup. For now, expect the stock to move according to both prices in the broader memory market and to its own product innovation.
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Jeremy Bowman has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology and Western Digital. The Motley Fool has a disclosure policy.
