SanDisk stock has fallen approximately 35% from its late June peak, despite remaining the best-performing S&P 500 component in 2026. The memory chip maker has benefited from a significant shortage driven by AI data centre demand. The company's most recent quarter saw revenue surge 51% quarter-over-quarter and 372% year-over-year. Two-thirds of this growth came from higher prices, with the remainder from increased production. SanDisk produces NAND memory chips, a commoditised market where current supply constraints have driven prices sharply higher. Input costs have remained stable whilst selling prices have soared. The shortage is expected to persist, as building new production facilities takes years and AI hyperscalers show no signs of reducing demand. New capacity may be immediately absorbed by these large purchasers.

SanDisk and Japan's Kioxia will invest over $31 billion in Japan through 2032 to expand memory chip production. The companies met Japanese Prime Minister Sanae Takaichi to discuss the plan, which requires government support. Part of the investment will go to Kioxia's Kitakami plant, funding an $11.30 billion facility to expand production of BiCS Flash memory technology. SanDisk's data centre revenue jumped 437% year-over-year to $5.2 billion in fiscal 2026. Total revenue reached $20.2 billion, up 175%, and the company swung from a $1.6 billion net loss to $11.4 billion in net income. The company has secured New Business Model agreements with eight customers, locking in contracted revenue of $93.9 billion. Management added $14 billion to its share buyback authorisation, bringing the total to $15.5 billion.

SanDisk, Phillips 66, and MetLife have collectively authorised $27 billion in new share buybacks, signalling management confidence in their cash flow strength after strong share price performance in 2026. SanDisk announced a $14 billion buyback programme, bringing total capacity to $15.5 billion—over 6% of its market capitalisation. The move follows exceptional results driven by AI-related demand for NAND flash SSDs, with revenue jumping 372% year-over-year and adjusted gross margin expanding to nearly 85%. SanDisk shares have surged over 500% in 2026, making it the best-performing large-cap US stock. The company plans to return 100% of excess cash to shareholders through buybacks, as it does not pay dividends. The buyback signals continued confidence despite the stock's remarkable run, potentially supporting per-share metrics going forward.