Key Points

SK Hynix indicates that constrained memory supply will persist through the coming decade.
This outlook supports Sandisk which has delivered strong revenue and earnings expansion amid robust memory demand.
Sandisk appears positioned for substantial gains given its earnings trajectory and attractive valuation.
10 stocks we like better than Sandisk ›

SK Hynix ranks among the leading memory producers globally. It holds solid positions in dynamic random-access memory and NAND flash segments which makes the chief executive recent remarks point to an enduring memory upcycle.

The South Korean firm chief executive Kwak Noh-Jung told Reuters that the memory shortfall is likely to intensify in 2027. He further noted that demand should exceed supply past 2030 even as the company ramps up production capacity. Such conditions favor Sandisk (NASDAQ: SNDK) a prominent player in memory that has delivered strong returns for shareholders recently.

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Sandisk plans to report fiscal 2026 fourth-quarter results on Aug. 5. SK Hynix remarks on industry conditions imply Sandisk may experience sharp gains following the release. Here is the reasoning.

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Sandisk results and outlook may surpass analyst forecasts

Sandisk focuses exclusively on NAND flash storage and holds 13 percent of that market per Counterpoint Research. SK Hynix maintains a larger 18 percent share in NAND flash. Therefore when SK Hynix highlights a worsening shortage in 2027 it suggests the price increases driving Sandisk expansion will continue.

NAND flash sector revenue rose 3.5 times year over year in the first quarter reaching 46 billion dollars. Analysts project Sandisk fiscal fourth-quarter revenue will climb 338 percent year over year to 8.34 billion dollars. Earnings growth is forecast to surge 117 times to 34.15 dollars per share. Should SK Hynix prediction materialize Sandisk figures stand a good chance of beating estimates.

The consensus earnings target for fiscal fourth quarter sits near the upper range of Sandisk guidance at 33.00 dollars per share. The company has secured multi-year customer contracts featuring variable pricing that enables it to benefit from NAND price rises. This setup supports the potential for stronger guidance based on SK Hynix view of tightening supply.

The shares retain significant upside potential

This semiconductor name has converted a 1000 dollar investment into 33000 dollars over the past year. Questions arise whether further advances remain possible after such performance.

Sandisk trades at 21 times forward earnings while earnings per share are projected to rise 220 percent in fiscal 2027 to 212.60 dollars. The firm can achieve this growth because NAND demand continues to exceed available supply.

This AI stock could surpass 4000 dollars at 20 times earnings after one year using the earnings estimate for the current fiscal year. That level represents nearly three times the present share price indicating investors may still find value in this AI name.

Should you purchase Sandisk shares at this time?

Before acquiring Sandisk shares review the following:

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Harsh Chauhan holds no positions in any mentioned stocks. The Motley Fool holds no positions in any mentioned stocks. The Motley Fool maintains a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq Inc.