SanDisk Stock: Has Its 'Nvidia Moment' Finally Arrived?

SanDisk's stock price has surged over the past year, rising more than thirtyfold and reaching nearly $1,500 per share. This growth is not merely a pedestrian imitation of Nvidia's first surge during earlier phases of the AI revolution. SanDisk's data center business jumped 437% to $5.2 billion in the fiscal year ended July 3, with revenue nearly doubling sequentially to $2.9 billion and up more than twelvefold from a year ago.

The company has signed New Business Model (NBM) agreements with eight data center and edge customers, which lock in committed bit volumes and mix fixed and variable pricing with floors and ceilings. These deals have a weighted average term of over four years, converting SanDisk's historically cyclical price swings into a more defined backlog.

SanDisk's underlying valuation hasn't had its 'Nvidia moment' yet, despite the company's data center business compounding at Nvidia-like rates. With nearly $94 billion of minimum contracted revenue, investors are pricing the stock as if a downcycle is the base case, rather than acknowledging the inevitable expansion in SanDisk's multiples.