Sandisk: Even After a 580% Rise in 2026, It's Still a Screaming Buy (NASDAQ: SNDK)

If you had the foresight to buy Sandisk (NASDAQ: SNDK) stock at the start of 2026, you're probably a happy investor. It's up a jaw-dropping 580% at the time of this writing, easily outperforming nearly every other stock in the market. However, the second half of 2026 hasn't been so pleasant. The stock is down by more than 30% from the high it touched in late June.

But I think this could be a great entry point. Sandisk remains a top option in this AI-powered market, and I think it could make investors a major return throughout the rest of 2026 for one simple reason.

Image source: The Motley Fool.

The memory chip crunch is far from over

Sandisk makes NAND memory, which goes into data storage devices like solid-state drives (SSDs). SSDs are used heavily in AI data centers, as running AI applications properly requires accessing and storing massive amounts of information rapidly. There is currently far more demand for all types of data center memory than producers are able to supply, and that shortage has caused memory prices to soar over the past year. This is also why prices on personal computers have increased, and it's rumored smartphone makers may hike their prices to reflect their higher memory costs, too.

The memory chip market has historically been cyclical, with demand rising and falling. However, with the AI infrastructure build-out expected to last beyond 2030, the current up phase of this memory chip cycle may be far more elongated than investors are used to, making Sandisk and its peers better investment options than they historically have been. One of Sandisk's peers, Micron Technology (NASDAQ: MU), told investors that it expects the memory chip market to remain supply-constrained beyond 2027, which points to at least another year and a half of strong results for Sandisk.

That's the outlook investors need to keep in mind when deciding if Sandisk stock is a good buy here, as its valuation looks incredibly attractive.

SNDK PE Ratio (Forward) data by YCharts.

Sandisk's fiscal year ends in June, so the steep drop-off in the chart above represents the point where the metric's calculation shifted to fiscal 2027's projections. If Sandisk can rise to about 30 times forward earnings to finish out fiscal 2027, then the stock could more than triple from today's level. That major upside potential makes Sandisk look like a great buy even after its 580% rise so far in 2026.

The AI build-out is far from over, and while memory chip manufacturers are in the process of boosting their production capacity, thus far, their increases haven't even come close to meeting demand. As a result, I think Sandisk is a solid buy now.

Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.