SanDisk Stock Is Up 133% This Year, Yet The Memory Trade Still Looks Cheap

Shares of SanDisk Corporation (NASDAQ:SNDK) have surged 133% year-to-date, making it the top performer in the S&P 500.

The rally coincides with a global memory shortage, which has driven a new group of high-flying stocks to triple-digit gains in months — yet traditional valuation metrics show little sign of overheating.

Peers are not far behind. Western Digital Corp. (NYSE:WDC) has climbed nearly 55%. Seagate Technology Holdings plc (NYSE:STX) has rallied 45%. Micron Technology Inc. has advanced 37% (NASDAQ:MU)

By contrast, the Invesco QQQ Trust (NYSE:QQQ) has gained just 0.28% this year. The performance gap is staggering.

Yet despite the explosive moves, valuations remain surprisingly restrained.

Goldman: Earnings Are Doing The Heavy Lifting

In a note published Wednesday, Goldman Sachs analyst Ryan Hammond wrote that within AI infrastructure, memory has become "the latest bottleneck and key focus of many investors."

According to Hammond, the large public memory names — Micron, Western Digital, SK Hynix and Samsung — have rallied an average 145% since the start of the fourth quarter of 2025 and 55% year-to-date.

Yet those gains have largely been explained by earnings growth.

The average memory stock trades at just 12x forward earnings — not only a discount to the market’s nearly double P/E, but also below its own five-year average multiple.

In other words: prices rose because profits rose.

Multiples didn't expand meaningfully.

Memory Stock Valuation Still Looks

The Nvidia Parallel

Hammond points to NVIDIA Corporation (NASDAQ:NVDA) as a recent case study.

From late 2022 through mid-2024, Nvidia's stock rose 12x — and earnings rose 12x. Valuation multiples remained roughly flat. Earnings did the work.

But over the past five months, Nvidia shares have moved sideways even as forward earnings estimates climbed 37%.

That dynamic — strong earnings but flat stock price — reflects what can happen when investors begin to worry about "over-earning" in cyclical industries.

Dominant near-term positioning can eventually give way to fears that demand is peaking, competition will intensify, or pricing power won't hold.

The result?

Earnings strength continues. Multiples compress. The net impact on share prices becomes less predictable.

What’s Next?

For now, earnings strength continues to justify the surge in memory stocks.

Prices have exploded higher. But multiples have not.

That leaves investors facing a different kind of question — not whether the rally has gone too far, but whether earnings can keep climbing fast enough to support it.

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