- By Chris Wood, Chief Investment Strategist at RiskHedge In 2026, something remarkable is happening... Since spinning out of data storage solutions provider Western Digital (WDC) in late February 2025, memory/storage company Sandisk’s (SNDK) stock has surged an astounding 627%—based on the January 7, 2026 closing price.

In 2025, Sandisk was the best performing stock currently in the S&P 500 by a wide margin. And it’s leading the index again so far in 2026.

(Currently in the S&P 500” because Sandisk wasn’t added to the index until late November 2025. But if it had been in the index for the whole year, it would have ranked #1. An interesting side note is that Western Digital was the #2 best performing S&P 500 stock in 2025. But our focus today is Sandisk.)

I want to walk you through what’s going on with Sandisk, explain why the stock has performed so well, and answer whether it’s still a good buy. To do this, we need to start with a discussion about what’s going on in the memory market, where Sandisk operates.

Imagine you’re trying to build the world’s best library.

You’ve hired the smartest librarians money can buy. They can read and analyze books faster than anyone on the planet. They can answer any question, find any connection, synthesize any insight—as long as they have fast access to all the books they need.

The problem is there aren’t enough bookshelves available to put in your library to store all those books. So your brilliant librarians can’t live up to their potential. When they try to answer a question, they must wait for the books they need to arrive from a warehouse down the road. They’re twiddling their thumbs while delivery trucks crawl through traffic.

That’s like what’s happening right now in the memory market because of AI.

The librarians are AI chips—processors like NVIDIA’s GPUs that can perform trillions of calculations per second. The bookshelves are memory chips—the technology that stores and retrieves all the data (books) the AI needs to work with. And right now, we’re in the middle of a massive bookshelf shortage.

For decades, the computing world viewed these memory chips as commodities. Essential? Absolutely. But nobody paid much attention to where they came from or who made them.

They were interchangeable parts made by more than a few companies. Buyers treated them almost like bulk wheat or oil. Prices rose and fell quickly with swings in supply and demand.

So memory chip makers went through brutal boom-bust cycles. When demand was high and prices rose, they’d flood the market with new supply. Then the eventual resulting glut would send prices crashing back down.

Rinse and repeat every few years.

Investors learned to treat memory stocks like hot potatoes—hold them too long and you’d get burned when the inevitable crash came.

But AI’s demand for memory is so insatiable, we’ve entered what industry analysts call a memory supercycle—a prolonged period of strong demand and tight supply that could last years, not quarters.

Here are some numbers that help quantify what’s happening:

• According to TrendForce, a leading industry research firm, prices for certain types of memory chips are rising 33% to 38% in a single quarter. That’s not a typo. In just three months, the price of these chips is jumping by more than a third.

• Dell and Lenovo, two of the biggest PC makers in the world, are raising their computer prices by 15% to 25% because memory has gotten so expensive.

The key question for investors is: Is this a structural shift in how the memory market works, or just a really strong cycle that will eventually crash like all the others?

Before we can answer that, we need to understand different types of memory and why they matter.

Time for a new analogy: Think of memory technology like the storage options in your kitchen.

DRAM is like the countertop right next to the stove. It holds the ingredients you’re actively cooking with—the data the computer needs immediately. It’s super-fast but relatively small and expensive. And your ingredients disappear when you turn off the power. That’s because DRAM is “volatile memory”—it forgets everything the moment the electricity stops flowing.

HBM (High Bandwidth Memory) is like a fancy counter extension that’s bolted directly onto your stovetop. It’s a special type of DRAM that stacks multiple layers of memory chips directly on top of the processor, allowing data to flow much faster.

NAND flash is like the pantry. It stores data permanently—your files, photos, programs, and documents all live here even when the power is off. It’s slower than DRAM but much cheaper and can hold way more stuff. Your smartphone’s storage, your laptop’s solid-state drive (SSD), and massive storage arrays in data centers all use NAND flash.

This last category—NAND flash—is Sandisk’s entire business. The company makes the memory chips that go into the pantries of computers, phones, and data centers around the world.

Historically, smartphones and personal computers dominated the NAND market. Mobile phones need storage for apps and photos. Laptops need solid-state drives to replace their old spinning hard drives. These markets are mature and predictable—they grow at modest single-digit rates.

But in 2026, something remarkable is happening. For the first time ever, data centers will become the single largest consumer of NAND flash, surpassing smartphones.

Think about what that means. The customer base for this technology is fundamentally shifting. Instead of selling to phone manufacturers who squeeze every penny, memory makers are increasingly selling to giant technology companies like Google, Amazon, Microsoft, and Meta—companies that care more about getting supply than pinching pennies on price.

This is why SanDisk’s CEO, David Goeckeler, gets excited when he talks about the data center market. In a recent conference, he explained that just a few months ago, his team projected data center storage demand would grow in the low-to-mid 20% range for 2026. Now they’re projecting growth of more than 40%.

That kind of demand acceleration, combined with tight supply, creates an extremely favorable environment for memory makers. And it’s why Sandisk’s stock has gone gangbusters.

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Chris Wood is Chief Investment Strategist at RiskHedge. To get more ideas like this from him, check out his substack Grow or Die.

Sandisk (SNDK) has a Disruption Score of 2.

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