Sandisk Stock: Can You Say ‘Bubble’?

On the June 1, 2026, episode of The Morning Filter podcast, Morningstar Chief US Market Strategist Dave Sekera unpacks Morningstar’s thesis on Sandisk SNDK after another stellar quarterly report. The stock has skyrocketed during the past 12 months. Shares of Sandisk trade well above our $1,000 fair value estimate. Here’s an excerpt from the episode.

Susan Dziubinski: Sandisk is your next sell, so tell us about it.

David Sekera: Sandisk, of course, is one of the five largest suppliers of NAND flash memory. We know there’s a huge shortage of memory chips available. Insatiable demand from the AI buildout boom for memory right now. Again, one of these companies can charge whatever they want for the product. People are going to pay it, so you see a huge increase in revenue. You’re also seeing a huge increase in operating margins at this point in time. Again, in my mind, I still think it’s more of a commodity-oriented product. At some point, supply is going to catch up, and when that happens, look out below. It’s a 2-star-rated stock at a 70% premium. We rate the company with no economic moat because we think it is a commodity-oriented product, Very High Uncertainty. It’s just phenomenal what this stock has done over the past 52 weeks. It’s gone from $40 a share to $1,600 a share.

Dziubinski: Morningstar thinks Sandisk stock is worth $1,000 per share. What are the assumptions underpinning that? What would you have to believe to justify the stock’s current price?

Sekera: All right. Running through the numbers here again to get to our $1,000 fair value. The average revenue over the past three years was $6.7 billion. We’re modeling that to triple here in 2026 to $19.7 billion. We’re looking for $46 billion in 2027. That’s over 6 times higher than what they did for revenue in 2025. Now, we are expecting that revenue here peaks in 2028 at slightly over $46 billion, and as we expect more memory chips to be manufactured and come online, maybe some technological change in AI that they don’t demand quite as much memory. We start looking for revenue to start coming down thereafter, but we’re still modeling almost $25 billion in 2030. For earnings, we’re looking for … I’m sorry, they posted $2.99 in 2025. Now, comparatively, they actually had negative earnings in 2023 and 2024. Want to guess what earnings in 2026 are going to be?

Dziubinski: No idea, Dave. What?

Sekera: $72.22.

Dziubinski: Wow.

Sekera: That’s compared to essentially $3 last year. In 2027, we’re modeling in $203 in earnings and then starting to come down in 2028 as the markets peak, and margins start to compress. We’re still looking for $194 in 2028. By 2030, we’re expecting that to come down to $65.88, which means that it’s trading at a 25 times our 2030 multiple. To get to the market price, I think what you really have to assume, and it’s not just this company, it’s all of these commodity-oriented tech hardware. You have to assume that AI has driven a permanent shift in demand for their products, with essentially no corresponding increase in supply or reduction in pricing and margins, really no change in AI technology that would require less memory. Again, even though we expect things to tail off in 2029 and 2030, by then 2031, that sets a new baseline to continue to keep growing thereafter as opposed to continuing to come down thereafter.

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