SanDisk Corporation (NASDAQ: SNDK) has become one of the most remarkable turnaround stories in recent market history — and the AI-driven memory supercycle that launched it isn’t slowing down. Since spinning off from Western Digital in February 2025 at $35.06 per share, SNDK climbed as high as 858% to its late-June peak, making it the single best-performing stock in the S&P 500. Yet shares have since pulled back 39% from those highs, falling 8% to 15% across multiple sessions in mid-July as the broader Philadelphia Semiconductor Index dropped more than 20%. For investors who missed the first run, the question now is whether this is a dip or a structural reversal.
The fundamentals argue strongly for the former. SanDisk’s fiscal Q3 2026 revenue hit $5.95 billion — up 97% sequentially and 251% year-over-year — with datacenter revenue alone surging 645% annually. Q4 guidance calls for revenue between $7.75 billion and $8.25 billion, with non-GAAP earnings per share of $30–$33 and gross margins expanding toward 80%. Most importantly, the company disclosed a contracted backlog of $41.6 to $42 billion, with its entire 2026 enterprise AI storage capacity already sold out under long-term agreements. That’s locked-in cash flow that competitors simply can’t match. The broader driver: hyperscaler capex is expected to reach $750 billion in 2026, and Goldman Sachs is projecting $7.6 trillion in total AI infrastructure spending through 2031, which is putting enormous pressure on NAND and DRAM supply. TSMC is reportedly looking at contract price increases of up to 10–20% in 2027, which only adds to the scarcity premium for established memory suppliers.
Goldman Sachs captured the institutional view clearly: on July 5, the bank raised its price target on SNDK from $1,200 to $2,200 while maintaining a Buy rating. The move wasn’t purely bullish speculation — Goldman actually cut its valuation multiple from 22x to 20x but doubled its normalized EPS estimate from $55 to $110, reflecting genuine earnings power acceleration. Hedge fund conviction has followed: 114 elite funds held SNDK at the end of Q1 2026, up from 75 the prior quarter — a 52% increase in a single quarter. Short interest is just 4.93% of the float, suggesting experienced traders aren’t betting against a company with a $42 billion backlog heading into an earnings report on August 5. For retail investors watching from the sidelines, the pullback to recent lows — while uncomfortable — may be exactly the kind of volatility that long-term positions are built on.
