Over the past year, SanDisk (NASDAQ: SNDK) witnessed the most astonishing turnaround in the history of the semiconductor industry. Its stock price soared from lowest $27.89 at the beginning of the split in February 2025 to $952.50 in April 2026, with its market value exceeding $140 billion. This "perfect storm" resulted from capital operations, AI necessity, and the mismatch between industry cycle and timing. It also led to the take-off of SanDisk's stock price.

How did the profits soar?

SanDisk's financial report for the second quarter of the 2026 fiscal year directly triggered a significant reaction in the secondary market: The revenue for Q2 reached $3.025 billion, a staggering 31% increase compared to the previous quarter. 

The most crucial data is the gross profit margin. SanDisk's GAAP gross profit margin skyrocketed from 29.8% in Q1 2026 to 50.9%. This means that for every hard drive sold by SanDisk, half of the revenue is pure profit after deducting costs. Net profit soared from $112 million to $803 million, increasing by over 600% year-on-year. This leap in profit scale has led the previously hesitant institutional investors (such as BlackRock and Vanguard) to start frantically buying up shares.

Re-adjustment of the valuation after division

In February 2025, According to the official spin-off announcement, Western Digital (WDC) completed its spin-off, separating the flash memory business into a new company called SanDisk. This spin-off was a prerequisite for the stock price to skyrocket. 

In the past, SanDisk's flash memory business was trapped within Western Digital's large but outdated mechanical hard drive (HDD) business. Investors wanted to buy the high-growth flash memory, but had to endure the low-growth HDD. After the spin-off, SanDisk was freed from the debt burden and low-margin business of its parent company. The capital market gave "pure flash assets" a much higher price-to-earnings ratio (P/E) than comprehensive storage companies. In the first three months after the spin-off, SanDisk reduced administrative expenses and its operating costs dropped from $511 million to $413 million, with a significant improvement in efficiency.

Will it continue to make rapid progress or will it only be a fleeting success?

Looking at the situation as of April 2026, we hold an attitude of "short-term optimism and long-term caution" towards SanDisk's future development. 

  • The order has been scheduled for 2028

According to industry research, major global cloud service providers (AWS, Google Cloud) have signed long-term supply agreements with SanDisk covering the period from 2027 to 2028. As reported by The Chosun Daily, these long-term agreements (LTAs) have become the primary contracting method to ensure supply stability amidst the AI inference surge. This indicates that SanDisk's performance in the next two years will have an extremely high minimum limit. 

  • Technical moat

SanDisk currently holds the lead in the number of stack layers for 3D NAND. As AI requires cheaper and larger-capacity storage, the QLC (quad-level cell) technology that SanDisk has vigorously promoted has occupied more than 30% of the data center market share. This technological lead ensures that it has a cost advantage in the next round of competition. 

  • Risk points

History has shown that the semiconductor industry is a highly cyclical sector. The current "price miracle" is due to the mismatch in production capacity among competitors such as Samsung. 

Potential risk: Samsung and Hynix have announced that they will invest $136 billion in NAND production lines in the second half of 2026. Once these production capacities are released in 2027, the current high-price myth may come to an end.

Conclusion and suggestions: 

SanDisk is currently experiencing its most glorious "Davis Double-click" moment in the history of the company. It has proven itself to be the "water seller" of the AI era. However, as a mature 

investor, we need to keep a close eye on those Korean rivals who are expanding production in the prosperous year of 2026, because the semiconductor industry has no eternal myths, only eternal cycles. 

Closely monitor the Q3 financial report (to be released by the end of April): If the gross margin of Q3 can remain above 52%, it indicates that SanDisk's pricing power remains stable, and the stock still has the potential to rise to $1,100. At the same time, be vigilant about capital expenditures. If SanDisk announces an extremely large capital expenditure plan in the second half of the year (massive factory construction), this is often a precursor to the peak of the industry cycle.