SanDisk stock has surged amid unprecedented capital expenditures in AI data centers, fueling explosive earnings growth and sharp share price gains. The company now trades at historically elevated multiples, with positive developments largely priced in. A slowdown in AI spending poses substantial downside risks.
Shift to AI Storage Solutions
SanDisk remains familiar to consumers for memory cards in electronic devices. The firm increasingly targets storage solutions for AI data centers, capitalizing on the ongoing boom in AI infrastructure investments.
Emerging Headwinds
Several challenges threaten this momentum. Power grid limitations could constrain data center expansion. Advances in storage efficiency may reduce overall demand. Investors also express concerns over sustained hyperscaler capital spending.
Correction Risks Ahead
Analysis indicates the period of rapid gains has peaked. Even subtle signs of decelerating AI capex could spark a significant pullback in SanDisk shares.
