By Nate Wolf

One issue a stock has when it surges 4,000% in just 12 months is that everyone wonders when shares will come back to Earth. Another issue: No one can figure out how to value it.

Sandisk is navigating that uncertainty right now, though shareholders won't mind too much after looking at their portfolios.

The flash memory maker has soared since spinning off from Western Digital in February 2025. It is up more than 4,300% in that time thanks to surging demand for memory from artificial-intelligence data centers and tight supply.

The stock dipped 2.7% to $1,546.30 on Wednesday.

Barclays analyst Tom O'Malley was the latest brave soul to try putting a number on Sandisk. He upgraded the stock to Overweight from Equal Weight and lifted his price target to $2,300 from $1,200 in a research note Tuesday.

The move came after Sandisk CEO David Goeckeler told investors last week that the company's use of long-term customer agreements will help insulate it from downturns. O'Malley is a believer in this new model, pointing out that the contracts incorporate some variable pricing to allow the company to realize future price growth. The longest contract stretches into 2031.

"These are the most desired contract types in the ecosystem today, giving customers supply visibility and SNDK guaranteed revenue and more confidence in their market outlook," he wrote.

Analysts are having a tough time keeping up with Sandisk's rise, though. While 79% of firms polled by FactSet rate the stock a Buy, the average target price is $1,684 and a majority of the price targets are now below Sandisk's actual share price -- such is the pace of the stock's rise.

Memory is a historically cyclical industry, which has kept Sandisk's multiple compressed. The stock has traded at around 10 times projected 12-month earnings for most of its year-and-change since the Western Digital spinoff. The broader PHLX Semiconductor Index trades at a 26-times multiple.

There are reasons to believe both that an industry can't suddenly break boom-bust demand cycles and that this AI cycle is different. Then again, those long-term contracts may be an escape valve.

The earnings and sales projections themselves have also become tricky. Sandisk reported adjusted earnings of 29 cents a share on revenue of $1.9 billion in the quarter ended June 2025. This time around, analysts expect earnings of $32.99 a share and revenue of $8.2 billion.

Based on recent history, there is a good chance even those meteoric growth expectations are too low. Sandisk surpassed earnings estimates by 60% last quarter and 71% the quarter before that. The company isn't just beating analysts' forecasts; it is making them look silly.

Write to Nate Wolf at nate.wolf@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 27, 2026 10:41 ET (14:41 GMT)

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