Jensen Huang called memory and storage the largest unserved market in AI. Nine months later, SNDK stock proved him right with an 800% surge. Following its February 2025 spinoff from Western Digital, SanDisk went from invisible to unstoppable. It became the S&P 500's best performer of 2025. The flash memory company Wall Street dismissed is now feeding data to every GPU on the planet.
The Conglomerate Discount: How Value Gets Buried
SanDisk spent years hidden inside Western Digital, lumped together with hard drives and valued as a cyclical commodity. Gross margins collapsed below 20% during the 2023 NAND glut. Investors saw price wars and oversupply. No one saw the AI storage thesis forming underneath. The flash business was treated as dead weight on the balance sheet. That blindness created the setup for what came next.
The Inference Bottleneck: When Storage Became the Limit
Training AI models requires compute. Running them requires storage. Every query to a large language model needs data retrieved in milliseconds, not seconds. As inference workloads scaled, the actual thinking and responding phase of AI, storage became the chokepoint. Enterprise SSD prices jumped 40% quarter over quarter. Hyperscalers that once bought flash on price alone started paying premiums for capacity and speed. The commodity suddenly had pricing power.
The Partnership Advantage: And the HBM Risk
SanDisk and Kioxia built their moat over twenty years, sharing the billion dollar cost of staying at the frontier. Together they produce 29% of global NAND. BiCS8, their latest 3D NAND architecture, stacks 218 layers with industry leading efficiency. But Samsung and SK Hynix are building something different. Both are integrating HBM with NAND, creating computational storage that processes data inside the drive instead of sending it to the GPU. SanDisk is betting that AI needs massive, cheap storage. The risk is that AI needs intelligent storage. If inference shifts toward on-drive processing, SanDisk's cost per bit advantage may not protect their margins.
Valuation Check: When Momentum Meets Math
Parabolic moves create parabolic expectations. The same investors who ignored SanDisk at the bottom are now chasing it near the top. Memory markets are cyclical by nature, and no spinoff changes that fundamental truth. The pattern repeats every cycle. Hyperscalers double order during shortages, building buffer inventory they do not immediately need. Then comes the digestion phase. Buying pauses, supply catches up, and margins compress. The question is whether this is 1999, the start of a new era, or 2021, a pull forward of demand that leaves the next two years empty. The answer is probably somewhere in between: a real secular shift, but with cyclical pain along the way. The best time to buy was when no one cared. Discipline means recognizing when easy gains are behind you, not ahead.
SanDisk spent a decade inside a conglomerate, undervalued and overlooked. The spinoff did not change the technology. It changed who was paying attention. AI does not just need faster chips. It needs storage fast enough to keep inference running. The companies building that layer are becoming as essential as the GPUs themselves. SanDisk is no longer a flash memory vendor. It is infrastructure for the intelligence age.