Sandisk (NASDAQ: SNDK) has been the top-performing S&P 500 stock over the past year, rising by about 4,200%. Its market cap has blasted past $240 billion, and based on its parabolic growth, a $1 trillion valuation may be realistic within the next five years.
Indeed, it may hit that milestone even earlier; fellow memory storage provider Micron (NASDAQ: MU) accomplished the feat recently, thanks to a surge of more than 800% over the past year. Sandisk has been growing faster than Micron in recent quarters, and both have long-term tailwinds.
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Substantial sequential growth is fueled by compelling tailwinds
High sequential growth has been the main story that has helped Sandisk gain market cap so rapidly since it was spun back off from Western Digital in February 2025. In its fiscal 2026 third quarter (which ended April 3), Sandisk’s revenue increased by 97% sequentially to $5.95 billion. Sandisk only brought in $1.7 billion in the prior-year period.
The NAND flash drive provider is riding the artificial intelligence (AI) wave. Grand View Research projects that the AI industry will grow at a compound annual rate of 30.6% through 2033. Sandisk has already been an outsized beneficiary of that trend, and its guidance implies high sequential growth will continue: The company is aiming for $8 billion at the midpoint for the fourth quarter of its fiscal 2026.
Maintaining that type of growth will be critical if the company is to reach a $1 trillion market cap within five years. Sandisk also boasts a surging net profit margin, which exceeded 60% in the most recent quarter. It was just 26.6% in the previous quarter, and in the one prior to that, it was just 4.9%.
Micron surprised many investors by reaching a $1 trillion market cap shortly after unlocking the perks of AI memory demand. Sandisk is achieving a similar degree of fundamental growth, but still is generating only about one-fourth of the revenue of Micron.
A multiyear chip shortage is upon us
One of the main concerns about investing in memory companies is that they operate in a cyclical industry. At intervals, demand grows for their products, resulting in a boom and a shortage, at which point the various players begin the multiyear process of building new production facilities to capitalize. In each previous cycle, supply has caught up to and exceeded waning demand, and those memory makers were left with inventory gluts that compelled them to cut prices and lower their margins.
