The Best Growth Stock to Invest $10,000 in Right Now

Buying growth stocks and holding them for a long time can help investors achieve market-beating returns, though there will be bouts of volatility along the way.

After all, growth stocks represent companies capable of growing at a faster pace than the industry in which they operate, so investors can decide to book profits when they become cautious. The same has been the case with Sandisk (NASDAQ:SNDK).

Shares of the memory specialist have surged by an incredible 827% over the past year. However, the semiconductor stock has pulled back 44% from the 52-week high it reached on June 22. The recent slide in Sandisk's shares can be attributed to concerns about the sustainability of the favorable demand-supply environment in the NAND flash market, as well as the viability of the huge outlay on artificial intelligence (AI) infrastructure.

Also, investors are fearing that potential competition from China could derail Sandisk's impressive growth. However, I feel that these fears are overblown, and the recent pullback in Sandisk stock gives investors a terrific opportunity to buy a top growth stock at an attractive valuation. Let's look at the reasons why.

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Sandisk's slide is a result of the market's overreaction

Sandisk stock took a big beating in July after Chinese memory company ChangXin Memory Technologies (CXMT) went public, causing panic in the memory sector as it aims to compete with giants like Micron Technology. Further, CXMT's claims that it is developing an advanced dynamic random-access memory (DRAM) chip have also weighed on the memory sector, including Sandisk.

Investors, however, should note that Sandisk doesn't compete with CXMT. Sandisk manufactures NAND flash storage products, a market that CXMT has yet to address. Also, even CXMT's existing DRAM technology is reportedly well behind the likes of Micron and SK Hynix. Given that CXMT was reportedly asking potential customers for prices at par with leading memory makers, such as Samsung and SK Hynix, it is hard to see it making a dent in the DRAM market until its promised technological gains materialize.

So, the fear created by the emergence of CXMT seems overblown. What's more, this isn't the first time that the emergence of a potential threat from China has created panic in the stock market. The launch of DeepSeek at the beginning of 2025 was reportedly set to signal the end of high AI infrastructure spending, but that hasn't been the case, as AI usage continues to increase.

As a result, investors will do well to look past the panic caused by news from China. Additionally, I have already stated that CXMT doesn't make NAND flash chips, so the sell-off in Sandisk seems overdone.

On the other hand, there isn't enough evidence supporting that the NAND flash industry's demand-supply advantage will vanish in 2027. The reason why I say this is that the AI boom has created terrific demand for NAND flash-based enterprise solid-state drives (SSDs) that Sandisk manufactures. The accompanying supply shortage has led to a massive price surge, with enterprise SSD contract prices reportedly up 3x year over year in the previous quarter.

Looking ahead, enterprise SSD demand is anticipated to grow at an annual rate of 35% through 2030 in a base-case scenario, according to McKinsey. Even better, market research firm IDC expects global SSD revenue to increase at an annual rate of more than 40% through 2030. This potential expansion in Sandisk's end market should pave the way for sustained growth in the company's revenue and earnings over the long run, especially considering that YMTC, China's state-backed NAND flash manufacturer, isn't expecting the supply crunch to ease until 2029.

Analysts, therefore, seem to be underestimating Sandisk's growth potential, as they believe its earnings per share will drop in fiscal 2029 (which will end in June/July 2029).

SNDK EPS Estimates for Current Fiscal Year data by YCharts

Sandisk could easily grow a $10,000 investment into a larger sum

Let's say you have built a diversified portfolio and are sitting on $10,000 in investible cash, then buying Sandisk with that money could turn out to be a profitable move. The company noted in its August Investor Day presentation that it sees its total addressable market (TAM) growing to $500 billion next year.

Sandisk posted $20 billion in revenue in fiscal 2026, and it reportedly controls 11% of the NAND flash market, according to Counterpoint Research. Sandisk's revenue, therefore, could increase at a tremendous pace over the next year and a half. Moreover, the company expects to clock an annual revenue growth rate in the mid-to-high teens between fiscal 2028 and fiscal 2030.

Additionally, it sees its non-GAAP operating margin increasing to 75% by fiscal 2030, which points to a big bottom-line improvement considering that its non-GAAP operating margin was 63% in fiscal 2026. So, Sandisk seems to be in a solid position to outpace analysts' growth expectations.

The company's earnings are expected to triple in fiscal 2027 to $214.82 per share, according to Yahoo! Finance consensus estimates, followed by a 24% increase next year to $266.30 per share. Assuming its bottom line grows even 10% annually in fiscal years 2029 and 2030, Sandisk's earnings per share could jump to $322.22 after four years.

If this AI stock trades at even 10 times earnings at that time, a significant discount to the S&P 500 index's forward earnings multiple of 20, its stock price could hit $3,222. That's 148% higher than Sandisk's stock price right now, suggesting that it can turn a $10,000 investment into nearly $25,000 by 2030. With Sandisk trading at just 17 times earnings, it is a good time to buy this stock before it starts soaring once again.

Harsh Chauhan 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.