Sandisk Stock Shows Why Investing Is Hard

• Sandisk's profits are skyrocketing, but investors can't beryllium precisely definite however precocious profits volition spell oregon however agelong higher profitability tin beryllium sustained.

• Investors should judge the uncertainty of investing, knowing that holding 1 victor tin much than offset mistakes.

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Don't look now, but Sandisk (NASDAQ: SNDK) is the hottest banal successful the S&P 500. Today's younker whitethorn beryllium unaware that this institution pioneered solid-state representation successful the 1990s and went nationalist implicit 30 years ago. It was aboriginal acquired successful 2015 and spun retired again successful 2025 astatine conscionable a $5 cardinal marketplace cap.

Roughly 30 years, and it was inactive lone worthy $5 billion. Three decades of going fundamentally nowhere.

Sandisk is surely going places now. It was included successful the S&P 500 scale aft going nationalist the astir caller time, and it was the top-performing banal successful the scale successful 2025. It's connected gait to instrumentality the crown again successful 2026, considering it's already much than doubled twelvemonth to date, arsenic of marketplace adjacent Jan. 21.

Was Sandisk banal an evident bargain erstwhile it was spun disconnected from Western Digital in February 2025? No, not necessarily. Is it an evident merchantability present that it's doubled successful worth successful little than 1 month? No. To the contrary, I judge Sandisk banal is simply a large reminder that investing is hard.

Warren Buffett championed the thought of intrinsic worth -- what a institution is really worth. For Buffett, intrinsic worth could beryllium calculated lone by estimating a business's aboriginal currency flows. Doing this calculation allows investors to bargain stocks astatine prices beneath their intrinsic value, virtually guaranteeing success.

Herein lies the situation of investing: Nobody tin foretell the future. This makes it highly hard to cipher aboriginal currency flows. And this is wherefore thing astir Sandisk banal is evident close now; it's hard to foretell conscionable however precocious its currency flows volition rise.

It's akin to what happened with Nvidia banal successful precocious 2021. The banal had climbed astir 1,000% successful the erstwhile 5 years and traded astatine an incredibly costly 100 times earnings. However, Nvidia banal has nevertheless climbed different 500% since past due to the fact that its net person skyrocketed acknowledgment to unprecedented request from AI infrastructure players.

While we can't foretell the future, Sandisk's aboriginal currency flows should beryllium markedly higher than contiguous due to the fact that request for its solid-state representation products is exploding higher. Inference is the latest question of AI innovation; AI makes autonomous decisions successful caller situations based connected grooming data. But this is memory-intensive. This leads Sandisk's absorption to judge that full shipped representation capableness volition much than treble from the extremity of 2025 to the extremity of 2029.