Key Points
The flash memory specialist became a standalone company again in 2025.
It's benefiting from a shortage of its storage devices, giving it pricing power.
However, near-perfection is seemingly priced into Sandisk's stock right now.
Since spinning off from Western Digital last year, Sandisk(NASDAQ: SNDK) has been the hottest stock in the S&P 500. In the past 12 months, the shares are up over 1,600%.
This incredible run is due to its role in the artificial intelligence (AI) ecosystem, as one of the main suppliers of advanced storage devices. These devices are crucial to AI because they allow companies to store and access vast amounts of data needed to train AI models.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Considering just how much Sandisk's stock has surged in the past year, is it too late for investors who weren't around for the current run?
Image source: Getty Images.
One downside of Sandisk's surge is how expensive the stock has become, which leaves little room for error. The stock seems to have near-perfect conditions priced into it that can be hard for Sandisk to sustain.
Right now, it's benefiting from a supply shortage in data center storage devices, allowing it to charge higher prices than it normally would. Once production of storage devices ramps up (especially from competitors), Sandisk's profit margin will inevitably drop, as the company will likely have to decrease prices to remain competitive.
At its current valuation and given its potential peak performance, there's more downside than upside for prospective investors in Sandisk's stock. I would shy away from it for now.
Should you buy stock in Sandisk right now?
Before you buy stock in Sandisk, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sandisk wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $420,595!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,152,356!*
Now, it’s worth noting Stock Advisor’s total average return is 901% — a market-crushing outperformance compared to 194% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 19, 2026.
Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool has a disclosure policy.
