The Rundown – Deep Dive: How SanDisk Became the Hottest Stock in the S&P 500

Host: Zaid Admani
Date: February 7, 2026

Episode Overview

In this special weekend deep dive, host Zaid Admani unpacks SanDisk’s explosive rise to become the S&P 500’s hottest stock. The episode details how a previously “boring” storage company has leveraged the artificial intelligence (AI) boom, breaking down SanDisk’s business model, the impact of AI on the memory market, and what the future may hold—bull and bear cases included. The analysis addresses not just SanDisk’s fundamentals, but the cycles and risks inherent to the memory industry.

Key Discussion Points & Insights

1. SanDisk’s Origins & Evolution

Timestamp: 00:40–02:17

• SanDisk is a familiar name, most recognized for co-creating SD cards and making USB drives (“You might have also bought a SanDisk USB thumb drive in college. This was before everything was on the cloud.” – [01:04])
• Acquired by Western Digital in 2016; the merger failed due to market misalignment.
• Spun off from Western Digital in February 2025—subsequently, the stock has soared “like 1500%.” ([01:28])
• Positioned as a developer and seller of NAND flash memory: technology that stores data persistently in phones, laptops, cars, and increasingly, data centers for AI applications.

2. SanDisk’s Business Segments

Timestamp: 02:17–03:45

• Three “buckets”:
  • Consumer (30% of revenue): Products for everyday users (USB drives, SD cards, SSDs).
  • Edge (55% of revenue): Industrial/commercial use, such as in cars, factories, medical equipment, and industrial robots—SanDisk’s largest segment.
  • Data Center (15% of revenue, but fastest growing): Critical for AI and cloud applications. Growth here is “up 64% quarter over quarter, according to their latest earnings report, which is an insane growth rate right now.” ([03:39])
• Data center adoption is the main engine behind the recent stock surge.

3. Changing Memory Industry Dynamics

Timestamp: 03:45–04:45

• Memory business is historically cyclical and volatile—companies previously suffered losses in downturns, as in the “nuclear winter in 2023.” ([04:10])
• AI-driven demand is rewriting the industry norms and business models.

4. The Bull Case: Why SanDisk Is Skyrocketing

Timestamp: 04:45–07:02

• Massive supply-demand mismatch:
  • Tech giants’ investments in AI/data centers are causing “demand for storage [to go] through the roof, but the supply can’t keep up.” ([05:18])
  • Recent cuts in production mean supply lag—“You can’t just build a memory chip factory overnight.”
• Financial implications:
  • NAND prices up 50% in three months.
  • SanDisk margin forecast: up from 50% to 65% “in a very short amount of time.” ([06:34])
• Long-term contracts:
  • Tech companies are “so desperate to lock up supply that they’re signing multi-year contracts with SanDisk.” ([06:43])
  • This shift offers predictability, countering past boom-bust volatility.
• Wall Street sentiment:
  • “13 firms on Wall Street have a buy rating on the stock right now.” ([07:00])

5. The Bear Case: Risks and Headwinds

Timestamp: 07:02–08:23

• Supply risks:
  • “The biggest risk here is history.” The “hog cycle” causes oversupply after price spikes, crashing prices and profits afterward.
  • Commoditization of NAND means competitors (Samsung, SK Hynix, new Chinese firms) can flood the market.
• Demand risks:
  • Big tech’s $700 billion capex plans could be scaled back if the ROI of AI investment is questioned.
• Notable caution:
  • “One of SanDisk’s competitors could flood the market with supply, which would bring down the price of memory chips, impacting SanDisk’s bottom line and eventually hurting their stock price.” ([08:02])

6. Host’s Take: Balanced Perspective

Timestamp: 08:23–09:38

• Impressed by current fundamentals: “Revenues are exploding, margins are expanding, and there seems to be no sign of a slowdown in demand from AI data centers.” ([08:40])
• Long-term contracts slightly de-risk the company but do not erase cyclicality.
• Greatest worry: Supply side. “If you’re looking at SanDisk right now, you have to ask yourself, do you believe the supply shortage for memory chips will last until 2028?” ([09:03])
• Psychological barrier of buying after a massive run: “The last thing you want to do is be caught chasing a vertical line.” ([09:25])

Notable Quotes

• On origins and market transformation:
  “SanDisk was the best performing stock in the S&P in 2025, jumping more than 500%, and it’s not slowing down so far ... AI has turned this boring storage company into the hottest stock in the world.” – Zaid ([00:15])

• On business segments:
  “Edge is actually SanDisk’s biggest segment right now, making up about 55% of their total revenue.” – Zaid ([03:13])

• On cyclicality:
  “The memory business, it’s historically been very cyclical. Prices are volatile, supply and demand can swing widely, and companies go through massive boom and bust cycles.” – Zaid ([03:45])

• On AI-driven demand:
  “The bull case for SanDisk basically comes down to one thing. There is a massive supply and demand mismatch of memory chips right now … data centers being built need tons of storage.” – Zaid ([04:45])

• On bear case:
  “Memory is pretty much like a commodity. There is minimal difference in the product regardless of who makes it.” – Zaid ([07:37])

• On the investment dilemma:
  “If you’re looking at SanDisk right now, you have to ask yourself, do you believe the supply shortage for memory chips will last until 2028?” – Zaid ([09:03])

Important Segment Timestamps

• SanDisk’s History & Acquisition – 00:40–02:17
• Breakdown of Business Segments – 02:17–03:45
• AI’s Impact on Memory Markets – 03:45–04:45
• Bull Case (Explosive Growth & Supply Constraints) – 04:45–07:02
• Bear Case (Cyclicality & Overcapacity Risks) – 07:02–08:23
• Host’s Balanced Conclusion & Investor Takeaways – 08:23–09:38

Memorable Moments

• The tale of the “nuclear winter” for memory companies in 2023 and how that led to underinvestment—and today’s supply crunch.
• SanDisk’s pivot from spot sales to long-term contracts, reflecting how AI is changing the semiconductor supply chain.
• Host’s candid warning on psychology: “The last thing you want to do is be caught chasing a vertical line.” ([09:25])

Summary

This concise deep dive decodes SanDisk’s meteoric rise in the context of AI-driven demand for memory chips and storage. Zaid Admani offers a user-friendly primer on the memory industry’s history, supply/demand dynamics, and the emerging role of long-term contracts, before issuing a reality check on cyclicality and competitive threats. Listeners are left with a clear understanding of both the opportunity and hazards in SanDisk’s stock, framed by the big question: is this still a good entry point, or a bubble in the making?