Sandisk Is Up More Than 35-Fold in a Year and Sits Nearly a Third Below Its Peak. History Says What Comes Next.

Memory maker Sandisk(NASDAQ:SNDK) has climbed more than 35-fold from its 52-week low of $43.20. That low was set on Aug. 20 of last year, so the run is just shy of 12 months old.

As of this writing, shares are near $1,600, down about 10% today as the whole memory group takes a beating. And even after a year like that, the stock remains about 32% beneath its June 22 peak of $2,354.39.

So what happens after a stock goes parabolic and then gives back about a third of the run? I went looking for comparable cases. The honest answer: History is split.

Image source: The Motley Fool.

A wild two months

The shape of the drawdown is more violent than that gap suggests. From the June 22 peak, shares fell below $1,000 in intraday trading on July 29, a drop of about 58% in five weeks.

Then the Aug. 13 investor day sent the stock up 14% in a single session, and it closed Monday at about $1,787 before today's slide.

The earnings underneath explain the violence in both directions. Gross margin reached 84.6% in the fiscal fourth quarter of 2026 (the period ended July 3), expanding from 26.2% a year earlier, on revenue of $8.97 billion, up 372% from the year-ago quarter. Management said about two-thirds of the quarter's sequential revenue growth came from higher pricing. In other words, this is a stock built on a pricing boom, and pricing can reprice fast in both directions. Multiyear supply contracts now cover about half the volume Sandisk expects for fiscal 2027, blunting part of that swing.

Of course, few stocks have ever moved like this, so a perfect precedent may not exist. The closest cases are still instructive.

The ones that stayed down

GameStop is the harshest case. The stock spiked about 20-fold inside a few months in early 2021, gave back most of it, and never returned. In the five years since, no yearly high has come within 40% of that peak.

Micron(NASDAQ:MU) deserves the most attention here, because it looked cheap the whole way down. The memory specialist rose about sixfold from its 2016 low to its 2018 peak. At that peak, shares traded at just over 5 times the $11.51 per share the company earned in fiscal 2018.

However, the low multiple didn't help. Revenue fell 23% to $23.41 billion in fiscal 2019, net income dropped from $14.14 billion to $6.31 billion, and the stock spent about two and a half years below its 2018 high.

The ones that came back

Nvidia lived through the same shape in 2018. The chipmaker had risen about 15-fold from its 2015 low by the time the stock peaked that October, and it went on to lose more than half its value by year-end.

Revenue fell 7% in fiscal 2020. But Nvidia returned to growth, and the stock climbed past its old high in 2020 -- and kept going.

Tesla is the fastest recovery in the set. After the stock rose more than eightfold in 2020, a sell-off had taken it down 36% from its late-January peak by early March 2021.

Deliveries nearly doubled that year, though, and by late October Tesla was back at record highs.

Which group is Sandisk in?

The two groups didn't split on how big the run had been, or on how hard the first leg down hit. They split on what earnings did next.

Micron's profits collapsed within a year of its peak, and GameStop barely had profits to lose. Nvidia's and Tesla's kept growing (Nvidia's after a one-year dip), and both stocks eventually made the drawdown look like a pause.

That's what makes Sandisk's current valuation striking. Today's price works out to about 22 times what Sandisk earned in fiscal 2026 -- and less than 8 times what analysts expect it to earn in fiscal 2027. A multiple that low is the market saying it doesn't believe the estimates. In that reading, the year ahead looks more like Micron's fiscal 2019 than anything resembling the forecasts.

The company's own guidance points the other way. Sandisk guided for fiscal first-quarter revenue of $10.3 billion to $10.8 billion, up from $8.97 billion, with gross margin holding in the 83% to 85% range. Revenue, by the company's numbers, is still set to climb.

History's answer is a split decision, and I think that's the useful part. A 31% gap to the old high predicted nothing on its own in any of these cases.

The stocks that got back to their peaks were the ones whose earnings kept growing through the drawdown, or dipped once and recovered, and the ones that never recovered saw their earnings roll over. Sandisk's slide should get judged the same way. The chart won't settle it. The next few quarters of memory pricing likely will.

Daniel Sparks has clients with positions in Tesla. The Motley Fool has positions in and recommends Micron Technology, Nvidia, and Tesla. The Motley Fool has a disclosure policy.