FOMO is a hard feeling to resist, and that is particularly true in the stock market. Watching a stock go on a parabolic run without having a stake in it is certainly no fun and can push investors into impulsive decisions, which brings us to the market’s current darling, SanDisk (NASDAQ:SNDK).
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Trade SNDK with leverageAfter being spun out of Western Digital in early 2025, the memory maker has grown at an amazing pace, evolving from a legacy storage business into a fast-growing AI infrastructure player. Investors who bought shares at the time of the spinoff would now be sitting on gains exceeding 3,900%.
The rally became easier to justify after the company’s latest earnings report. Sandisk posted 251% year-over-year revenue growth in fiscal Q3, along with a 97% jump from the prior quarter. Fueled by exceptionally strong demand for NAND products and higher average selling prices for memory solutions such as SSDs, the company delivered triple-digit increases across its major metrics, including operating income, earnings, and free cash flow.
And looking ahead, the company’s Q4 guide points to about 320% year-over-year revenue growth, supported by continued memory supply constraints and sustained enterprise demand tied to AI infrastructure.
So, there’s no doubt the company is firing on all cylinders, but that brings us back to the first paragraph and whether it is worth chasing the stock at current levels.
One investor, known by the pseudonym The Asian Investor (TAI), argues that the answer is no, and recommends staying away right now.
While conditions across the memory segment remain favorable, TAI says the stock is now “very highly priced,” currently valued at 11.9x forward FY2026 revenue, well above its historical norms. By comparison, the company’s average price-to-sales ratio over the past three years is just 2.2x, underscoring how optimistic investors have become about its prospects.
Using another example, TAI points out that Micron, one of SanDisk’s main rivals in the memory and storage industry, has a much broader memory portfolio with a stronger focus on DRAM products, including high-bandwidth memory solutions that are driving much of the company’s current earnings surge. Despite this positioning, Micron trades at a forward price-to-revenue multiple of just 7.7x.
“As a result,” says the 5-star investor, “I see a risk profile that is skewed to the downside for SanDisk as the company’s valuation potential seems to have already been fully realized. I would recommend investors be aware of the FOMO trap and sell into the strength.”
All things considered, TAI assigns SNDK shares a Sell rating. (To watch TAI’s track record, click here)
So, that’s The Asian Investor’s view, but what do the Street’s analysts make of that assessment? In short, they completely disagree. Based on a mix of 13 Buys vs. 3 Holds, the analyst consensus rates the stock a Strong Buy. However, going by the $1,409 average price target, the shares are now overvalued by 3%. With this in mind, watch out for either price target hikes or rating downgrades shortly. (See SNDK stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.