Why Did Sandisk Stock Pop Today?
Key Points
Western Digital will cut its Sandisk stake in half, exchanging SNDK stock for WDC shares.
Western Digital stock looks cheaper, but Sandisk stock may be the better GARP stock.
- 10 stocks we like better than Sandisk ›
Sandisk (NASDAQ: SNDK) stock jumped 5.8% through 10:15 a.m. Friday -- and for a most curious reason.
In a filing with the SEC yesterday, Western Digital (NASDAQ: WDC) confirmed it is "exchanging" 1,038,681 shares of Sandisk stock for shares of Western Digital currently held by "certain institutional investors."
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
This is curious because... investors in both semiconductor companies appear to think they're getting the better deal. Not only is Sandisk stock up 5.8%, but Western Digital stock is up 6.5%!
Image source: Getty Images.
Bargains are in the eye of the beholder
S&P Global Market Intelligence data confirm that at last report, Western Digital owned 1.2% of Sandisk stock -- approximately 1.78 million shares. "Exchanging" 1 million of those shares for its own stock will reduce WD's stake in Sandisk to a mere 0.5%.
So what does that mean?
From one perspective, it means Western Digital thinks its own stock is a better bargain than SanDisk's. You can call a transaction an "exchange," but so is any sale or purchase. Effectively, what WD is doing today is selling Sandisk stock and buying WD stock instead.
Looked at from the other side of the transaction, "certain institutional investors" seem to have come to the opposite conclusion, and are happy to unload their Western Digital stock for more shares of Sandisk!
Who's right?
Who's right, Western Digital or the institutions? From a value investor's perspective, I lean Western Digital's way. Priced under 32 times trailing earnings, WD stock costs less than half the 64.3-times price-to-earnings ratio on Sandisk. It's the more obvious value stock.
On the other hand, analysts predict Sandisk will nearly triple its profits in 2027, while WD's profits are set to fall. Forward P/E ratios have the two stocks trading neck and neck -- 29x forward earnings for Sandisk; 28x earnings for WD.
With Sandisk the faster grower, it's probably the best bet for growth at a reasonable price.
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 $438,283!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,257,427!*
Now, it’s worth noting Stock Advisor’s total average return is 938% — a market-crushing outperformance compared to 206% 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.
See the 10 stocks »
*Stock Advisor returns as of June 12, 2026.
Rich Smith 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.
Recommended Articles
