SNDK Hits a 52-Week High: 3 Reasons Why the Stock is Worth Buying Now

Sandisk SNDK shares hit a 52-week high of $395.16 on Jan. 12 and closed at $389.27. SNDK stock has jumped 816.3% over the past six-months, easily surpassing the broader Zacks Computer and Technology sector and the Zacks Computer- Storage Devices industry, which returned 20.1% and 94.7%, respectively, in the same period.Sandisk shares are benefiting from a transformative shift in the NAND flash memory market, surging demand from artificial intelligence applications and the company's technological leadership in next-generation storage solutions. The company has outperformed its peers, Western Digital WDC, Seagate STX and Micron Technology MU, over the same time frame, shares of which have returned 216.9%, 115.6% and 191.6%, respectively. Let us delve deeper and find out why the stock remains a buy.SNDK Share Price PerformanceImage Source: Zacks Investment ResearchAI Infrastructure Buildout Supports SNDK's ProspectsThe booming AI sector is creating massive opportunities for Sandisk. The company's advanced BiCS8 technology is proving to be a game-changer, already accounting for 15% of total bits shipped in the fiscal first quarter, with expectations to become the dominant technology in SNDK's production mix by fiscal year-end.BiCS8 delivers high-capacity, power-efficient solid-state drives (SSDs), perfectly suited for AI applications requiring rapid processing of enormous data volumes. As rapid expansion continues in the AI space, investments in data centers and AI infrastructure are projected to surpass $1 trillion by 2030, creating substantial long-term demand for SNDK's products. The data center segment is experiencing remarkable momentum, with revenues reaching $269 million in the fiscal first quarter, up 26% sequentially. SNDK projects data center demand will surge in the mid-40% range this year, significantly exceeding earlier projections.Major cloud customers are showing strong interest in SNDK's Stargate product line, which focuses on storage-optimised SSDs. The company currently has two hyperscalers qualifying its 128-terabyte drives built on BiCS8 technology, with a third hyperscaler and a major storage equipment manufacturer lined up for 2026. This expanding customer base and deepening relationships with hyperscale operators are expected to enhance Sandisk's market position as it competes with Western Digital, Seagate and Micron Technology across enterprise storage solutions.The Zacks Consensus Estimate for SNDK’s fiscal second-quarter EPS is pegged at $3.26, up by a penny over the past 30 days.Sandisk Corporation Price and Consensus Sandisk Corporation price-consensus-chart | Sandisk Corporation QuotePC Refresh Cycle and Edge Market Strength Aid SNDK's DemandA robust PC upgrade cycle is creating significant opportunities for Sandisk as enterprises and consumers transition to Windows 11 while Windows 10 approaches its end-of-life milestone. Industry forecasts point to low-single-digit PC unit growth with mid-single-digit storage capacity increases per device in 2026. The integration of generative AI capabilities into PCs and smartphones is creating additional tailwinds, with smartphone capacity per device expected to grow in the high single digits in 2026 despite modest unit expansion. Edge computing revenues reached $1.39 billion in the fiscal first quarter, jumping 30% year over year.SNDK is developing high-bandwidth flash technology to address emerging AI inference requirements across data center and edge applications. The company's technical advisory partnership with SK Hynix is facilitating customer engagement for inference workloads, opening new growth avenues beyond traditional storage.The consumer segment is delivering solid momentum, with SNDK's partnership with Nintendo proving particularly successful. The co-branded Switch 2 microSD Express Card achieved over 900,000 unit sales in the fiscal first quarter. The company is strengthening its gaming presence through the launch of Sandisk microSD for ROG Xbox Ally. Consumer revenues reached $652 million in the fiscal first quarter, up 27% year over year. The Zacks Consensus Estimate for SNDK's fiscal 2026 revenues is pegged at $10.45 billion, indicating 42.07% year-over-year growth.SNDK Trades at Attractive Valuation Despite Strong RallyDespite the stock's impressive surge over the past six months, SNDK's valuation appears attractive relative to its growth prospects. The stock trades at 4.79x forward 12-month price-to-sales, below the broader sector multiple of 7.47x. While SNDK commands a premium to the Zacks industry average of 2.15x, this differential reflects the company's superior BiCS8 technology leadership, expanding data center presence and exposure to high-growth AI infrastructure spending.Relative to peers, SNDK's multiples compare favourably with Western Digital at 5.66x and Seagate at 5.96x, while trading slightly below Micron Technology at 5.08x. With strong revenue expectations and earnings estimate revisions trending upward, SNDK's valuation appears reasonable.SNDK's ValuationImage Source: Zacks Investment ResearchConclusionSandisk is expected to benefit from strong demand for its BiCS8 technology, the ongoing PC refresh cycle and growing interest in high-bandwidth flash technology for AI inference applications. The company's expanding data center presence, robust consumer partnerships and favorable supply-demand dynamics in the NAND market position SNDK for sustained growth. These factors justify the stock's current valuation.Sandisk currently sports a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. 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Click to get this free report Western Digital Corporation (WDC): Free Stock Analysis Report Seagate Technology Holdings PLC (STX): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report Sandisk Corporation (SNDK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks