It has been just under a year since digital storage giant Western Digital spun off flash storage specialist Sandisk (SNDK 5.59%), and the latter has turned into one of the hottest stocks on the market since its separation.
Shares of the company -- which specializes in NAND flash storage solutions for smartphones, personal computers (PCs), tablets, automotive applications, wearable devices, and data centers -- have shot up a stunning 1,400% since the spin-off. Investors may now be wondering whether it is worth holding this semiconductor stock after its red-hot rally.
Let's take a closer look at Sandisk's long-term prospects and check whether it can deliver more upside over the next three years.
Image source: Getty Images.
Sandisk's growth story is just getting started
We have already seen that Sandisk's storage solutions are used across multiple applications. The edge devices market, which includes PCs and smartphones, is its largest business segment, accounting for 55% of its revenue in the second quarter of fiscal 2026 (which ended on Jan. 2, 2026). Sandisk's revenue from this segment shot up by 63% from the year-ago period, to just under $1.7 billion.
The company pointed out that the proliferation of artificial intelligence (AI) in the PC and smartphone markets is a major catalyst for this segment. That's not surprising, as generative AI-capable smartphones and PCs are equipped with higher storage to support local AI tasks. Importantly, shipments of these devices are poised to accelerate at a healthy pace over the next three years.
Market research firm IDC estimates that generative AI smartphone shipments could jump to 912 million units in 2028, up from 234 million units in 2024. Meanwhile, generative AI PC shipments are predicted to jump to 138 million units in 2028, up from just over 24 million units in 2024. So, Sandisk should continue to witness healthy demand from these end markets in the long run.
NASDAQ: SNDK
Key Data Points
At the same time, investors should note the strong growth Sandisk is witnessing in data centers, where demand for fast flash storage solutions such as solid-state drives (SSDs) is increasing. SSDs offer much faster data transfer speeds and greater energy efficiency than hard-disk drives (HDDs). Specifically, SSDs can be a hundred times faster than HDDs, enabling instant data transfer at higher bandwidths.
Of course, HDDs are significantly cheaper than SSDs. However, the shortage of HDDs is pushing AI infrastructure companies toward SSDs. SSDs can also reduce the total operating costs of data centers thanks to their energy efficiency and faster data transfer rates.
As such, it won't be surprising to see the data center business moving the needle in a bigger way for Sandisk over the next three years, especially considering the massive investments in this space. The company reported a 76% year-over-year increase in data center revenue in the previous quarter to $440 million. This impressive growth seems sustainable, as Sandisk's storage solutions have been qualified for use by a second hyperscaler customer, and it is on track to bring additional hyperscalers on board.
Sandisk notes that it will begin recognizing revenue from its new hyperscaler customers in the next few quarters. All this explains why analysts are expecting a sharp spike in Sandisk's top line. Specifically, its revenue is expected to more than double in the current fiscal year from $7.36 billion in the previous one, followed by another significant jump in the next fiscal year.
SNDK Revenue Estimates for Current Fiscal Year data by YCharts.
Eye-popping earnings growth should pave the way for massive stock price upside
Sandisk isn't just enjoying healthy top-line growth. The supply-constrained nature of the memory market is also pushing prices higher. According to market research firm TrendForce, NAND flash memory prices could jump by 55% to 60% in the ongoing quarter, up from the earlier estimate of 33% to 38%.
What's more, NAND flash memory is expected to remain in short supply through 2028, driven by a jump of almost 3x in demand by that time as compared to 2024 levels. This should pave the way for a robust jump in Sandisk's earnings, following a projected 1,220% increase in the current one to $39.45 per share. As the following chart indicates, Sandisk's earnings could almost double in the next fiscal year.
SNDK EPS Estimates for Current Fiscal Year data by YCharts. EPS = earnings per share.
Given that the flash storage market is likely to sustain solid growth beyond next year, Sandisk could see a big jump in its earnings after the next couple of years. But even if we assume a conservative 25% increase in its bottom line in fiscal 2028, its earnings could jump to just over $95 per share within the next three years.
Multiplying the projected earnings by the tech-focused Nasdaq-100 index's forward earnings multiple of 25 points toward a stock price of $2,375, which is over 4x Sandisk's current stock price. So this AI stock has the potential to become a multibagger over the next three years. That's why investors should consider buying it hand over fist, as it is trading at just 15 times forward earnings right now.
