Sandisk (SNDK): Evaluating Valuation After AI-Driven Analyst Upgrades and New Industry Partnerships

Sandisk (SNDK) is suddenly back in the spotlight after a powerful rally that has many investors taking notice. The latest surge stems from optimistic market calls around the NAND memory sector, with investor excitement reaching new highs amid talk of AI transforming tech infrastructure. The buzz began when analysts spotlighted Sandisk’s technology, partnerships, and exposure to expanding demand for enterprise storage, all set against a backdrop of bullish forecasts and recent conference presentations.

This recent momentum follows a strong run for Sandisk, with shares soaring over 83% in the past month and marking a new all-time high after rising more than 30% this week alone. Key catalysts include fresh commentary about Sandisk’s BICS 8 process and partnerships with leading players like SK hynix and Kioxia, as well as positive signals from industry events such as SEMICON India 2025 and the Goldman Sachs Communacopia. The shift in sentiment suggests that investors are now reassessing Sandisk’s growth trajectory, particularly as AI infrastructure spending shows no signs of slowing.

With the stock’s quick climb, the big question arises: are investors looking at an undervalued opportunity, or is the market already factoring in all the expected growth?

Price-to-Sales of 1.7x: Is it justified?

Based on the price-to-sales ratio, Sandisk stock appears somewhat expensive compared to the broader US Tech industry, which typically trades at a lower multiple.

The price-to-sales (P/S) ratio is a commonly used valuation metric for technology companies, especially those that may not yet be profitable. It compares a company’s market capitalization to its total revenue, reflecting how much investors are willing to pay for a dollar of sales. For fast-growing tech firms, a higher P/S ratio is often justified by strong future growth prospects.

In Sandisk’s case, its P/S ratio of 1.7x stands above the industry average of 1.5x. This suggests the market is currently pricing in higher expectations for revenue growth or business improvements compared to peers. However, investors should ask whether Sandisk’s underlying fundamentals, such as revenue growth pace and pathway to profitability, fully justify this premium valuation.

Result: Fair Value of $94.34 (UNDERVALUED)

See our latest analysis for Sandisk.

However, downside risks remain, including Sandisk’s negative net income and the possibility that slower-than-expected revenue growth could impact investor confidence.

Find out about the key risks to this Sandisk narrative.

Another View: DCF Adds a Different Perspective

Looking beyond sales multiples, our DCF model offers a more holistic estimate of Sandisk's worth. It suggests the stock is actually undervalued at current prices and challenges the impression set by market multiples. Which view is closer to reality?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Sandisk to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Sandisk Narrative

If you have a different perspective or want to investigate the numbers yourself, you can easily craft your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Sandisk.

Looking for more investment ideas?

Stay ahead of the market and uncover promising opportunities by using the Simply Wall Street Screener. Take charge of your portfolio and do not let the next big winner slip past you. Start your search with these handpicked themes:

• Uncover the strongest small-cap contenders shaking up finance by using our penny stocks with strong financials.
• Boost your yield and add resilience to your holdings with our list of dividend stocks with yields > 3%.
• Tap into the transformative potential of robotics, automation, and neural networks with a selection of AI penny stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com