Sandisk (NASDAQ:SNDK) stock continued its rally this month and reached a new all-time high. It has jumped by 710% this year and 4,890% in the last 12 months, making it the best-performing company in the Nasdaq 100 and S&P 500. 

Analysts are Bullish on the Sandisk Stock

Despite the ongoing surge in SNDK stock, analysts remain broadly bullish and expect further upside. In a recent note, analysts at Cantor Fitzgerald boosted their target from $1,800 to $2,900. 

Mizuho hiked its target from $1,825 to $2,200, while Bank of America (NYSE:BAC) increased to $2,100. The most optimistic analyst is Mehdi Hosseini of Susquehanna, who hiked his target from $2,000 to $3,250. 

Such a move would bring its market capitalization to over $480 billion. It would be one of the best returns on Wall Street as the company was spun off from Western Digital (NASDAQ:WDC) in February last year at a $7 billion valuation. 

Sandisk is Benefiting From the Memory Boom

Sandisk has soared since its spin-off because of the ongoing boom in the artificial intelligence (AI) industry. This boom, especially in the memory industry, has accelerated this year, with companies like Meta Platforms (NASDAQ:META) and Alphabet (NASDAQ:GOOG) continuing their spending.

Wall Street analysts are optimistic that Sandisk's business will continue growing in the coming years. The average estimate among 19 analysts tracking the company is that its revenue will surge 160% this year to $19.6 billion. They expect it to jump by 121% in the following year to $43.4 billion. 

Sandisk's earnings-per-share is also expected to soar from $2.99 in 2025 to $65 this year and $183 in 2026. 

Valuation multiples show that the company is not all that overvalued, as it has a forward price-to-earnings ratio of 30, lower than the technology sector median of 33. Its forward PEG ratio has dropped to just 0.09, also lower than the median of 1.42. 

SNDK Shares Face Key Risks Ahead

While the Sandisk stock has the bullish momentum, it is facing some major risks ahead. The first main risk is that, historically, no stock goes up forever without major pullbacks. For example, Nvidia (NASDAQ:NVDA) stock has dropped by 13% from the year-to-date high. As such, there is a risk that it will retreat a bit in the near term.

The other risk is that the law of supply and demand suggests that companies in the industry will ultimately boost supply to take advantage of the elevated prices. If this happens, an elevated supply will likely lead to higher inventory levels and lower prices. 

Technicals also suggests that the Sandisk stock has become highly overbought. The Relative Strength Index has jumped to 81 on the weekly chart, suggesting that a pullback may happen in the coming months.

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