Sandisk Is Up More Than 1,700% in a Year and Still 33% Off Its Peak. History Says This is What Happens Next.
Key Points
Sandisk has been perhaps the biggest breakout stock of the past two years.
It has returned more than 4,300% since it went public in February 2025.
It is down 33% from its peak but remains a strong buy.
Terms like "breakout stock," "going parabolic," and "meteoric rise" get tossed around a lot, but no stock represents those hyperbolic descriptions more than Sandisk (NASDAQ: SNDK).
Let's just take a moment to look at the insane performance of Sandisk, which makes solid-state drives, NAND flash drives, and memory cards for data centers and artificial intelligence (AI) computing.
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Sandisk had been a public company for years, known for the flash drive sticks you stick into your computer to store data. From 1995 to 2016, it traded on the Nasdaq until it was acquired by Western Digital. Sandisk stock was off the market until early 2025, when Western Digital spun it off as a standalone company again.
Image source: Getty Images.
It started trading at $35 per share on Feb. 13, 2025.
As of Sept. 15, 2026, it's trading at $1,552 per share. That's a total return of 4,334% in about a year and a half. On an annualized basis, it's a 977% annualized return.
If you were opportunistic enough to buy 100 shares of Sandisk at its market debut and invested $50 per month, that initial $3,500 investment would be worth about $131,000 today.
That's a breakout stock that went parabolic on a meteoric rise -- and then some.
Down 33% from its peak
If you caught lightning in a bottle and invested in Sandisk from the beginning, or even somewhere along the way amid its rise, you're probably quite pleased. But the question now is, what comes next?
Over the past 12 months, Sandisk has returned a staggering 1,700%, trading at $1,552 per share.
But the scary thing is that Sandisk stock is down about 33% from its peak, closing at $2,335 per share on June 25.
So what should investors make of this? Is it time to cash out, or does Sandisk have some more fuel in the tank?
Sandisk is actually cheap
A stock that's up 1,700% in a year and trading at $1,552 per share is typically not one most investors would consider cheap. But that is actually the case with Sandisk after this 33% sell-off.
Sandisk stock is trading at 22 times earnings and just 7 times forward earnings. Its 7x forward earnings valuation actually puts it into value-stock territory. That is a testament to Sandisk's massive earnings power, as it is in the middle of a supercycle for memory and storage stocks.
In its most recent quarter, its fiscal fourth quarter, Sandisk saw revenue increase 51% from the previous quarter, not year over year, to $8.97 billion. Two-thirds of the revenue gains came from higher pricing, as the insatiable demand for its products has given it massive pricing power. For the full fiscal year, revenue was up 175% to $20.25 billion, with data center revenue rising 437% year over year.
Sandisk anticipates $10.5 billion in revenue in fiscal Q1 2027, which would be a 17% increase over last quarter.
The $93 billion question
Sandisk currently has a $93.9 billion backlog in contracted revenue in the pipeline after signing multiple long-term deals with major hyperscaler customers that should sustain its earnings power for years to come, perhaps even beyond the peak of the current supercycle, which is still several years away. About $16.5 billion of that is guaranteed, which could cause trepidation for some investors if the hyperscalers hit a rough patch and have to cancel, alter, or postpone some of these deals.
Maybe some are cautious about the long-term contracts, or maybe there is concern that investors may cash out again and take more profits. That might explain some reasons for the relatively low valuation.
However, if that massive and growing backlog increases, fueled by an ongoing supercycle that is creating huge demand, investors would be keen to grab more shares at this discounted valuation. History suggests that a stock with this type of earnings power and these high margins is too good to pass up at this low valuation.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.