SanDisk shares have climbed more than 1,200% since splitting from Western Digital, but a lock-up expiration, mixed analyst targets, and a looming supply cycle raise fresh questions about what’s next.
SanDisk Corporation has had one of the more striking runs in the technology sector over the past year. Since separating from Western Digital in February 2025, shares of the flash memory company have climbed more than 1,200%, turning a $1,000 investment into roughly $13,000 and pushing the company’s market capitalization to approximately $110 billion. On Thursday, those shares were trading around $742, well off their all-time closing high of $753.69 reached the day before.
The question investors are now asking is not what drove the rally. That part is fairly clear. The harder question is whether the stock has more room to run or whether the best of the move is already priced in.
SanDisk and the AI storage boom
The company’s ascent is grounded in something tangible. As artificial intelligence workloads continue to expand across data centers, demand for NAND flash storage, the memory technology inside solid-state drives, has accelerated. SanDisk posted second-quarter revenue of $3.03 billion, a 61% increase from the same period a year earlier, with non-GAAP earnings of $6.20 per share. Data-center revenue jumped 64% sequentially in that quarter alone.
For the current quarter, management guided toward revenue of between $4.40 billion and $4.80 billion. CEO David Goeckeler pointed to a stronger product mix, faster enterprise SSD rollouts, and AI-driven demand as the primary drivers. The company also extended its flash supply agreement with Japan-based Kioxia through the end of 2034, a move designed to reduce the cyclical volatility that has historically defined the memory business.
The broader backdrop supports the growth case. Citi analyst Asiya Merchant raised her price target on SanDisk to $875 from $750 while maintaining a Buy rating, arguing that NAND demand will exceed supply for the foreseeable future. Wedbush and Needham have also revised their targets upward in recent weeks, reflecting genuine optimism about the company’s positioning in the AI infrastructure buildout.
Where the valuation debate stands
The stock currently trades at roughly 19 times estimated forward earnings, a multiple that does not appear excessive in isolation. But valuation models produce wildly different conclusions depending on the assumptions used. Financial data firm Simply Wall Street pegged fair value at around $717 using an earnings-multiple method but arrived at $1,993 using a discounted cash flow model. That spread says less about which number is correct and more about how much the stock’s worth depends on expectations for margins, pricing power, and the durability of tight AI demand.
The average Wall Street price target sits at $688, drawn from 12 Buy ratings and three Holds across major firms. That figure is below where the stock is currently trading, which is not a common situation for a name with this much analyst support. Some analysts have set targets above $800, and at least one has penciled in $1,000. The consensus, such as it is, points to a stock the market has already repriced aggressively.
The lock-up expiration adds a near-term variable
One development that landed quietly on Thursday carries potential significance. A lock-up agreement covering approximately 2,033,708 shares of SanDisk common stock expired on March 20, 2026. The agreement had restricted directors, officers, and Western Digital from selling or otherwise transferring those shares for 30 days following a prospectus supplement. With that period now closed, those shares are free to move into the market.
Lock-up expirations do not always trigger selling pressure, but they introduce it as a possibility, particularly when a stock has appreciated as sharply as SanDisk has over the past year.
The supply cycle risk
The memory business has a well-documented history of boom-and-bust cycles tied to the relationship between supply and demand. Mike O’Rourke, chief market strategist at JonesTrading, offered a candid assessment after Micron announced a $5 billion increase to its fiscal 2026 capital expenditure plan, taking it above $25 billion. O’Rourke said the move was a reminder that the memory business is likely to return to its commodity nature in coming years as new manufacturing capacity comes online.
SanDisk’s current premium valuation assumes that the AI-driven demand cycle is durable enough to absorb that new supply without the kind of price compression that has historically followed periods of tight inventory. That assumption may prove correct. It also may not. Investors who came late to the rally are now bearing most of that uncertainty.
Story credit: marketscreener
Disclaimer: This article is for informational purposes only and does not constitute financial advice. The author and publication are not registered investment advisors and do not provide personalized investment recommendations.