Key Points
Sandisk became a public company for the second time in 2025.
Data center usage caused a shortage in available high-speed memory storage.
Sandisk was able to use a supply shortage to raise prices.
Roughly 11 months ago, Sandisk (NASDAQ: SNDK) hit the market (again) as a spinoff from Western Digital. It was Sandisk's second time being a public company, after being acquired by Western Digital for $19 billion in 2016.
In those 11 months, Sandisk has been one of the stock market's best-performing stocks, up around 1,050%. That means had you invested $100 on Feb. 13, 2025, your investment would be worth nearly $1,150 as of market close on Jan. 15.
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Data by YCharts.
Why has Sandisk's stock exploded?
By breaking away from Western Digital, Sandisk was able to focus fully on its flash memory business. Flash memory is essentially high-speed digital storage, so the timing was ideal during the current artificial intelligence (AI) boom because data centers need a ton of it.
For AI to be effective, it has to be trained on lots of data (and that's putting it lightly), and that data has to be stored somewhere. The increased demand for storage created a supply shortage, allowing Sandisk to capitalize on it and raise prices for its various storage products significantly.
In its latest quarter (ended Oct. 3), its data center revenue increased by 26% from the prior quarter to $269 million. It was tied for the company's fastest-growing segment.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.