SanDisk stock has surged by more than 60% within the first two weeks of 2026, following multi-fold returns in the prior year. This sharp upside comes as stories linked to AI and data centers have turned into gold over the last 12 to 18 months, with ideas closely tied to AI growth creating immense value.
A report indicating that SanDisk can potentially double the price of 3D NAND for enterprise SSDs has been a key trigger for the new year rally. Nomura opines that memory suppliers are likely to increase pricing for enterprise-grade 3D NAND in the short-term and mid-term. If this holds true, there will be a significant impact on growth, EBITDA margin, and cash flows in 2026 and beyond.
For Q1 2026, SanDisk reported revenue growth of 21% on a year-on-year basis to $2.31 billion. The company's GAAP operating income increased by 878% to $176 million. With industry tailwinds, strong growth, and firm pricing, SNDK stock has surged by 745% in the past six months.
One highlight of the Q1 2026 results was a 26% year-on-year growth in data center end market revenue. SanDisk indicated that it's engaging with five major hyperscale customers. According to SanDisk, investment in data centers and AI is expected to surpass $1 trillion by 2030.
SanDisk reported negative adjusted free cash flow of $150 million for Q1 2025. For the comparable quarter this fiscal year, the adjusted free cash flow was $448 million. The company ended Q1 with a strong cash buffer of $1.4 billion.
The company's BiCS8 technology accounted for 15% of total bits shipped in Q1 2026. SanDisk expects this technology to reach "majority of bit production" by the end of the fiscal year. BiCS8 technology supports the manufacture of power-efficient SSDs with high capacity.
Based on the ratings of 20 analysts, SNDK stock is a consensus "Moderate Buy." Fourteen analysts assign a "Strong Buy" rating to SNDK, while six analysts have a "Hold" rating. Analysts have a mean price target of $276.67 currently, which would imply a downside potential of 27%. With the most bullish price target of $390, the upside potential for SNDK stock is 3%.
Analysts expect earnings growth of 551.7% and 110.6% for FY26 and FY27, respectively. The forward price-earnings ratio stands at 28.83. Last month, BNP Paribas opined that the memory sector is entering a "historic upcycle," which will continue to benefit companies like SanDisk and Micron Technology.
Headquartered in Milpitas, California, SanDisk is a developer and manufacturer of storage devices based on NAND flash technology. The company's solutions include solid-state drives, embedded products, removable cards, and wafers. SanDisk has a global presence and caters to a wide range of applications, with the recent surge in demand being driven by AI.