SanDisk (SNDK) shares continued their meteoric rise, trading near $1,980 on Monday, up approximately 5%, as investors piled into the memory chipmaker amid surging demand from artificial intelligence data centers. The stock's rally has propelled the company's market capitalization past $310 billion, making it one of the standout performers in the AI-linked hardware space this year.
The latest leg higher follows the company's fiscal third-quarter earnings report, which revealed revenue of $5.95 billion—a staggering 251% increase year-over-year and a 97% sequential jump. Gross margin expanded to 78.4%, underscoring SanDisk's pricing power in the memory market. Data-center sales alone climbed 233% sequentially to $1.47 billion, fueled by AI infrastructure customers locking in long-term supply agreements.
CEO David Goeckeler described the moment as a 'fundamental inflection point,' noting that SanDisk is transitioning toward higher-value markets and securing multiyear customer deals. The company signed five long-term supply contracts during the quarter, three of which closed in Q3, totaling $42 billion. These agreements are designed to mitigate the notorious volatility of NAND flash memory pricing, a key concern for skeptics.
SanDisk also announced a $6 billion share buyback program and guided fiscal fourth-quarter revenue between $7.75 billion and $8.25 billion, above consensus expectations. The strong outlook has emboldened bulls who argue that the AI memory boom is structurally different from past cycles, driven by sustained demand from hyperscale cloud providers and enterprise AI workloads.
However, not everyone is convinced. Analysts at Esxeleryn Analytics reiterated a Sell/Exit rating on the stock, warning that SanDisk is being valued more like a software company than a hardware supplier. They pointed to the 78.4% gross margin, heavy reliance on spot-market bets, and the risk that NAND prices could normalize as supply catches up with demand. 'The memory market remains inherently cyclical,' the analysts cautioned, suggesting that the current euphoria may not last.
The debate comes as SanDisk's stock has rallied nearly 600% in 2026, prompting some pundits to question whether the run is sustainable. A recent article from The Motley Fool highlighted that while demand for memory hardware remains robust, investors holding the stock might consider taking profits, and newcomers could find better opportunities elsewhere.
For now, the market continues to pay a premium for scarce memory chips, and SanDisk's contract-based model offers some insulation from price swings. The key question is whether the company can maintain its lofty margins when the next NAND cycle inevitably shifts. With AI-driven demand showing no signs of slowing, SanDisk appears well-positioned in the near term, but the long-term outlook remains clouded by cyclical uncertainty.
