The Run of a Lifetime

Like it or not, AI is here and it’s quickly ramping up. While potential job loss is a scary development, there are plenty of opportunities to hedge against this disruption and make a profit.

Large players such as Nvidia, Microsoft, and Google were shoo-ins to benefit. But there are tons of smaller, lesser-known companies that play just as important a role—and their stocks are a lot cheaper.

One that was cheap and is no longer is Sandisk.

A year ago, Sandisk (SNDK) was that little old memory storage company that you could find on shelves at your local electronics department. Those memory cards that you can buy for your camera or computer.

It was a nice little company — a product of Western Digital, which purchased it in 2016 for $16 billion.

Its valuation trickled down to under $7 billion when it was spun off into a separate entity and IPO’d in early 2025. Why, after dropping so much in valuation, was it spun off?

Memory was about to become a lot more important.

While Western Digital’s game is cloud storage, Sandisk’s focus is NAND flash that is local to your device.

NAND storage is key for inference workloads in AI models. Or, as simply defined here, the “doing” part of artificial intelligence.

AI models are trained over time, requiring DRAM storage that is provided by massive players like Samsung and SK Hynix. The memory of this storage is lost when the CPU loses power.

When you ask Chat GPT or Grok a question or to perform a task, its interactions are stored using NAND flash to be easily accessible before or after the CPU is shut down. These “AI assistants” need to know the person they are working with, and so it is necessary to be able to call upon this data instantaneously. Instead of having to upload and download the data to and from the cloud, the data is pulled from the local NAND storage on a whim.

It is efficient, cost effective, and necessary for a world that is quickly becoming powered by AI.

So, it makes sense why Western Digital would spin off Sandisk in hopes of taking advantage of this new opportunity, separating these two storage focuses.

14 months since its IPO, Sandisk has rocketed from a $6.8 billion valuation to $175 billion. In stock price terms, that’s $36 to almost $1,200.

It’s hard to fathom that that kind of growth is possible in such short time. But, it’s not just market sentiment and hype that has driven the stock so high. Its growth is backed by real-world happenings.

Sandisk recently announced it has netted more than $42 billion in contracts with large companies looking to utilize its NAND storage. Sandisk revealed within its recent quarterly report that it has generated more operating profit in this quarter alone than the prior three years combined.

When demand outpaces supply, those suppliers reap the benefits. Companies like Sandisk have taken full advantage.

Sandisk far from dominates this market, as previously-mentioned players like Samsung remain in strong position. But to this point, Sandisk has made a remarkable rise from a relatively-overlooked storage company to now being a key cog in an engine that is just getting in gear.