Up Nearly 700% This Year, Is Sandisk Still Worth Buying?

If you invested in Sandisk (NASDAQ: SNDK) stock at the start of 2026, you're a happy camper. It has risen nearly 700% since the start of the year, delivering gains that normally take decades to achieve. If you've missed out (like me), then you're obviously a bit disappointed, but these stocks aren't easy to pinpoint; otherwise, everyone would be enjoying massive gains.

The question is, is there enough value left in Sandisk's stock to warrant investing in it right now? Let's take a look, as some of the tailwinds that drove it higher are still intensifying.

Image source: Getty Images.

Sandisk is thriving from the memory chip shortage

The artificial intelligence (AI) build-out is stretching many industries thin. The AI hyperscalers are looking to spend hundreds of billions of dollars in data center capital expenditures this year, and that could ramp up to $1 trillion in 2027, according to Nvidia. Countless types of hardware go into a new data center build, ranging from electricity generation to cooling infrastructure to computing chips. There's also a massive need for storage, which is where Sandisk is thriving.

Data centers don't use slower hard drives to store information. They typically deploy solid-state drives (SSDs), which Sandisk manufactures. SSDs are actually powered by a ton of NAND memory chips, which are affected by the memory chip shortage. There is just so much demand coming from the AI realm that these businesses don't have the supply or production capacity to keep up with demand, which is causing prices to soar. Sandisk benefits from this supply crunch, as it can now sell its products at a higher cost, boosting revenue and profits at the same time.

It has been widely reported that Sandisk has sold out of production capacity in 2026, and 2027 is being bought up as well. This makes for a great multiyear growth landscape for Sandisk, which could lead to soaring profits. By the end of fiscal year 2027, which ends in June 2027, Wall Street estimates that Sandisk's earnings per share (EPS) will reach $177.84. If the stock trades for 20 times earnings at that point, its price will be north of $3,500 per share. That's about a double from today's price, so there still could be plenty of upside remaining in Sandisk's stock in a short time frame.

A large part of next year's performance will be based on whether this supply bottleneck isn't resolved and will last into 2028. If it is, then I think Sandisk's stock could double from here. If supply ramps up and prices fall, then Sandisk could struggle to reach this goal.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.