History Says Sandisk Stock Crashes Soon. Here's Why That's Not Going to Happen.

Source The Motley Fool

Key Points

  • Cyclical demand waves historically don't last for five years, but this one likely will.

  • Sandisk stock is cheaply priced.

  • 10 stocks we like better than Sandisk ›

Sandisk (NASDAQ: SNDK) is having a year. The stock has risen over 650% so far in 2026, ranking it the best stock in the S&P 500 (SNPINDEX: ^GSPC) this year, but that may not be the end of its incredible run. Many investors are worried about Sandisk stock imploding on itself simply because of the industry it's in. History also backs this notion up, but this time could be different.

The reality is that this demand wave is unlike anything investors have ever seen, and that difference could be your edge to buying one of my projected best-performing stocks in 2027 on sale.

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Sandisk logo on a red background image of a  phone and a laptop.

Image source: The Motley Fool.

Why is Sandisk stock expected to crash?

Sandisk produces NAND memory, which is utilized in long-term information storage devices like solid-state drives (SSDs). Usually, there is a lot of excess capacity in memory chips, so these companies aren't optimized for profit. Now and again, a wave of demand for a new technology comes around, and these companies ramp up production to meet it. Their revenue and profits soar because they're using their facilities at full capacity. Eventually, this demand dies down, and the companies revert to their old, barely profitable state.

This cyclical nature worries some investors, so the stock is never fully valued at its peak states. The market knows Sandisk and its peers are at a peak state right now because AI computing demand is maxing out the industry. While the consensus is that this demand won't last forever, what the market gets wrong is how long the demand curve will last.

The market is pricing in a Sandisk stock crash tomorrow, trading at a mere 8.3 times fiscal year (FY) 2027 earnings (ending around June 30).

SNDK PE Ratio (Forward) Chart

SNDK PE Ratio (Forward) data by YCharts.

That's a lot of pessimism, especially considering how fast Sandisk is growing (it grew revenue at a 372% pace during the first quarter of FY 2027). All of that can be traced back to investors knowing this industry is cyclical, but it doesn't appear to be that way right now.

One of SanDisk's industry peers, Micron (NASDAQ: MU), told investors that it sees demand tightness worsening in 2027 and 2028, leading to multiple years of growth in this space. Furthermore, clients have signed deals through 2030, indicating strong long-term demand.

While the market may be pricing in a Sandisk downturn over the next year with how cheap its stock looks, data from the companies say it won't happen for a few more years. That bodes well for Sandisk stock, and I think it can have a great year next year with how in demand its products are.

Should you buy stock in Sandisk right now?

Before you buy stock in Sandisk, consider this:

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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.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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