Anyone who has been active in markets long enough knows the feeling of a missed opportunity. Sometimes you just have to acknowledge, without bitterness, that you missed a trend. SanDisk (SNDK) is my current example. It is by far the best-performing stock in the S&P 500 year to date, up more than 360%, and it recently crossed the $1,000 mark for the first time.

Yesterday (April 30, 2026), the company reported quarterly results after the close, beating both its own guidance and consensus estimates. Revenue grew 97% quarter over quarter and 251% year over year, reaching nearly $6 billion. Profits and margins moved higher alongside it. Operating profit came in at $4.11 billion, representing an operating margin of almost 70%. Impressive.

The numbers confirm, once again, the exceptional business environment for this storage specialist. SanDisk makes data storage based on NAND flash technology: the chips that store data in smartphones, laptops, and data centers. Its core products are SSDs, memory cards, and USB drives.

After DRAM, NAND storage is now widely considered the second major bottleneck for AI growth, driven by the expanding use of agentic AI workflows. At the same time, demand for AI PCs is pushing storage requirements at the consumer device level. Supply is constrained, NAND prices have risen sharply, and that is driving results.

I have to admit that I underestimated these dynamics. SanDisk has been on my watchlist for a while. But I assumed that the expected growth was already sufficiently priced into the rising stock. The valuation looked too ambitious to me. The price-to-cash-flow ratio currently sits at around 33. Compared to other AI beneficiaries like Nvidia at around 40, that looks relatively moderate. But forming a concrete valuation judgment on SanDisk is genuinely difficult: the stock has only existed since early 2025, there is no meaningful historical baseline to compare against, and in a cyclical market, these multiples can be cut in half quickly. Getting on the moving train now is therefore not an option for me. At least not as a long-term investor.

Even with everything looking rosy right now, the dependence on the AI investment cycle is a central risk. At some point it will matter. The problem is recognizing when. There are no signs of a slowdown today, but if hyperscaler demand were to crack, SanDisk would be hit disproportionately. The market will watch demand trends closely over the coming months. Any signs of fading momentum could trigger rapid re-ratings. Investors are sensitive to that. And historically, the NAND market is highly cyclical: boom phases are regularly followed by sharp price collapses, with the expected impact on earnings and stock prices.

There are also trade and tariff conflicts that could disrupt supply chains. SanDisk does not own independent chip fabrication facilities. For its entire NAND production, it depends on a single partner: Japan's Kioxia and its Japanese manufacturing sites.

Even if the chart looks tempting and might be interesting for short-term trading, I don't see a compelling risk/reward profile as an investor right now. I'm happy for anyone who recognized this trend early. I'm looking for the next opportunity.

Is SanDisk a buy? I'm staying out of SanDisk despite the impressive results. The business environment is exceptional right now, but the stock is up more than 360% year to date and trades at a price-to-cash-flow ratio of around 33. With no meaningful valuation history since the stock only began trading in early 2025, and a NAND market that is historically highly cyclical, I see no compelling risk/reward for a long-term investor at current levels. The risk of a demand-driven re-rating is real.

Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. I am not a financial advisor. Always do your own research before making any investment decision.

Disclosure: I may hold direct or indirect positions (including options) in any securities mentioned in this newsletter. My opinions are my own and always honest.