Nvidia (NVDA 1.53%) has been one of the most important companies in the world over the past three years or so, given its pioneering role in the proliferation of artificial intelligence (AI) technology.
The semiconductor giant has maintained a dominant position in AI chips since the technology became popular in November 2022, following the release of OpenAI's ChatGPT, which was trained using Nvidia chips. The company's chip systems have been adopted by all the major hyperscalers and AI companies over the years to train various AI models and move them into production, helping Nvidia become the world's largest company in the process.
And now, there's another semiconductor stock that's making waves on the market thanks to AI. Sandisk (SNDK 6.17%), which was earlier a part of digital storage solutions provider Western Digital and was spun off a year ago, has shot up a phenomenal 1,600% since its listing. Let's see why that has been the case and decide whether it will play a pioneering role in AI, like Nvidia.
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Sandisk is a critical player in the AI infrastructure ecosystem
Sandisk's flash storage products are used across multiple applications, ranging from smartphones and computers to memory cards and gaming consoles to cloud computing. Data centers currently account for a small part of the company's overall business, generating just under 15% of its revenue in the second quarter of fiscal 2026 (which ended on Jan. 2, 2026).
However, the segment's revenue jumped by a remarkable 76% year over year to $440 million, outpacing growth in its other two business segments. This impressive growth was driven by the growing adoption of Sandisk's storage solutions by companies building AI infrastructure. CEO David V. Goeckeler remarked on Sandisk's January earnings call: "We are seeing strong adoption across all types of AI infrastructure builders, including cloud hyperscalers, edge and enterprise data centers, OEMs, and system integrators deploying AI at scale. Our technology has become a critical enabler of these deployments, delivering the performance characteristics required for optimized AI infrastructure."
It is easy to see why Sandisk's flash storage products are popular in the AI infrastructure segment. The solid-state drives (SSDs) that the company manufactures can help lower the total cost of operation (TCO) of AI data centers because of their low energy consumption and faster transfer speeds. According to one estimate, a server equipped with flash storage can reduce power consumption and the count of server racks by a whopping 90% when compared to traditional hard-disk drives (HDDs).
NASDAQ: SNDK
Key Data Points
As speed and, more importantly, power, are the factors that can limit the performance of AI data centers, it is easy to see why infrastructure providers are leaning toward SSDs to meet their storage needs. Also, the massive amount of data that needs to be stored and transferred while carrying out AI workloads has led to a shortage in the storage industry.
HDDs are reportedly in short supply until the end of 2027, which is another reason why demand for Sandisk's data center storage products has boomed.
Also, the memory market shortage has led to an eye-popping jump in prices, giving Sandisk's bottom line a big boost. Its adjusted earnings jumped fivefold year over year in the previous quarter to $6.20 per share. Even better, analysts expect Sandisk's earnings to jump 13-fold in the current fiscal year to $39.45 per share.
With the memory supply shortage anticipated to continue until 2028, Sandisk seems poised for outstanding growth over the next few years. But can it establish a position like Nvidia in the flash storage market?
The company is becoming a bigger player in flash storage
Nvidia maintains a dominant position in AI chips with an estimated 81% market share, according to market research provider IDC, despite facing competition from several chip designers over the years. Sandisk, on the other hand, is a much smaller player in the flash storage space.
According to market research firm TrendForce, Sandisk was the fifth-largest player in the NAND flash space in the third quarter of 2025, with an estimated share of 12.4%. That's quite some way off leader Samsung's 32.3% share. But what's worth noting is that Sandisk is doing better than companies like Micron Technology in this space, clocking much faster revenue growth.
What's more, Sandisk is looking to push the envelope on the product development front as well, having struck a partnership with SK Hynix last year to develop high-bandwidth flash. This product could enable an eight- to 16-fold increase in memory capacity compared to the dynamic random-access memory (DRAM) currently used in AI chip systems.
Sandisk could therefore continue to gain share in the global flash storage market in the long run. So, while Sandisk isn't a dominant player in AI chips like Nvidia right now, the possibility of the same happening in the long run cannot be ruled out. That's why it would be a good idea to buy this AI stock while it trades at just 15 times forward earnings, lower than Nvidia's reading of 25.
