Key Points
Sandisk (NASDAQ: SNDK) may go down as one of the best spinoffs in history. On Feb. 24, 2025, Sandisk spun off from its parent company, Western Digital. It started trading for around $22, and a stock split was likely the last thing management was thinking about then. However, now that’s in the cards, because Sandisk stock trades for a jaw-dropping price of around $1,750 per share.
There really isn’t any historical precedent for Sandisk splitting its stock because it is such a new company, but I think a stock split could be coming very soon. However, there are more reasons than an impending stock split for investors to get excited about Sandisk stock.
When could a stock split be coming?
For the most part, companies tend to announce their stock splits in the quarterly earnings before their annual shareholder meeting, so they can include the decision to split the stock on the ballot. Last year, Sandisk’s shareholder meeting occurred on Nov. 18, not long after the company reported fiscal fourth-quarter results in mid-August. I wouldn’t be surprised if Sandisk were to announce a stock split during its Q4 earnings this year, mainly due to how the stock price has skyrocketed.
While Sandisk has had solid execution, the reality is that it didn’t have to do a whole lot to get its price to skyrocket. Instead, market conditions did the heavy lifting. Sandisk makes NAND memory, which is used for long-term data storage. There is a huge demand for this in data centers, as they have to keep mountains of information stored for AI models to properly function.
With a shortage of storage devices around the planet, the price of the product naturally rose. Sandisk benefits from this, as it can charge a premium for its product, and its customers will pay for it. Demand from data centers doesn’t look to be slowing down anytime soon, and many projections point toward 2030 as the year when a decline may begin. That’s a long way from now, and Sandisk can continue thriving in the current market conditions.
The demand for storage devices and NAND memory will have a profound effect on Sandisk’s finances, as Wall Street analysts project 127% revenue growth for its fiscal 2027, which started on July 1. Furthermore, despite Sandisk’s major run-up over the past year, it trades for just 9.3 times forward earnings, so it isn’t an expensive stock, either.
While a stock split announcement may be coming, the business behind the stock is still booming, making it a phenomenal stock to consider buying now.
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Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool has a disclosure policy.
