SanDisk (SNDK) shares rallied sharply on Friday, gaining as much as 8.04% in intraday trading, as investors welcomed the company's upcoming inclusion in the S&P 100 index and digested its blockbuster fiscal fourth-quarter results. The move underscores the market's growing enthusiasm for AI-related memory and storage plays.
Index inclusion adds short-term catalyst
The S&P 100, a subset of the S&P 500 comprising some of the largest and most established U.S. companies, will add SanDisk before trading begins on Monday, September 21. SanDisk replaces Colgate-Palmolive, which has been a long-time member of the index. S&P Dow Jones Indices announced the change earlier this month.
Index inclusion typically triggers buying from funds and exchange-traded products that track the S&P 100, as they adjust their portfolios to reflect the new constituent. This rebalancing demand likely contributed to Friday's share-price surge. However, while the index entry provides a temporary boost, the company's long-term valuation will hinge on its operational performance and the sustainability of AI-driven demand.
Fiscal Q4 results show explosive growth
SanDisk's financial performance has been nothing short of remarkable. For the fiscal 2026 fourth quarter, which ended July 3, the company reported revenue of $8.97 billion, a 372% increase year over year and a 51% sequential gain. Diluted earnings per share came in at $43.97, swinging from a loss in the prior-year period and up 91% from the previous quarter.
The results are a direct reflection of the booming demand for memory chips used in artificial intelligence applications. AI servers require substantial amounts of high-speed NAND flash storage, positioning SanDisk as a key beneficiary of the ongoing AI infrastructure buildout. The company's stock currently trades at roughly 24 times trailing earnings and about eight times forward earnings, reflecting investor expectations of continued growth.
AI demand remains the core driver
Looking ahead, the trajectory of AI-related semiconductor demand will be critical for SanDisk. Nvidia CEO Jensen Huang recently made bullish projections at an AI executive summit, reportedly stating that chip sales in 2027 are expected to double compared to 2026. Such forecasts reinforce expectations for sustained demand for high-performance computing infrastructure, including memory and storage components.
SanDisk's exposure to NAND flash storage places it squarely within the broader AI investment theme. Wall Street remains constructive on the stock, with analysts maintaining a consensus Buy rating and an average 12-month price target of approximately $2,124.
As SanDisk prepares to enter the S&P 100 and continues to post exceptional revenue growth, investors will be watching closely to see whether AI-driven demand can sustain the company's momentum beyond the initial index-inclusion boost. The company's ability to secure long-term deals and manage memory pricing will be key factors to monitor, as highlighted in recent analysis of its 500% surge.
While the near-term outlook appears bright, some analysts caution about potential risks, including rising competition from Chinese memory makers and the possibility of a broader sector pullback. Nonetheless, the current momentum, coupled with forecasts of memory price surges, suggests that SanDisk remains a central player in the AI memory story.
This article is for informational purposes only and does not constitute financial advice.
