Sandisk could outpace Nvidia in Q2 as NAND flash prices rise and AI data-center demand strengthens

Artificial intelligence (AI) chip leader Nvidia had a weak start to 2026, with its shares falling 6.5% in the first quarter. Despite the company’s expected acceleration in growth driven by robust demand for its latest AI processors, the stock’s decline has raised questions among investors—particularly as Nvidia still trades at 21.5 times forward earnings while analysts forecast earnings to rise 74% this year.

Against that backdrop, another AI-related stock—SanDisk—has drawn attention for being cheaper than Nvidia while delivering faster earnings growth. SanDisk’s shares surged 167% in the first quarter, and the article argues that the company could extend that outperformance into the second quarter.

Flash storage prices set up a stronger Q2

SanDisk produces flash memory storage products including solid-state drives (SSDs), memory cards, and USB drives. The article attributes SanDisk’s momentum to demand from AI data centers that is outstripping available supply.

In January 2026, peer Kioxia said it had already sold out its 2026 NAND flash supply. SanDisk management similarly noted on its January earnings call that it sees “customer demand well above supply beyond calendar year 2026.” The resulting imbalance is pushing up NAND flash prices.

Market research firm TrendForce expects contract prices for NAND flash memory to rise 70% to 75% in the current quarter (Q2) versus Q1 levels. This would follow a 60% increase in NAND flash prices in Q1, according to the article.

SanDisk earnings accelerate

The article highlights a sharp improvement in SanDisk’s earnings performance. Non-GAAP earnings in the second quarter of fiscal 2026 (ended Jan. 2) rose to $6.20 per share—up five times year over year.

SanDisk also guided for fiscal Q3 earnings per share of $12.00 to $14.00, compared with a $0.30 loss per share in the year-ago period. With NAND flash prices expected to increase faster in calendar Q2, the article suggests there is a strong possibility SanDisk will deliver standout guidance when it reports later this month.

Valuation remains a key part of the argument

Analysts expect SanDisk’s earnings to jump 64 times year over year in the fourth quarter of fiscal 2026 (which the article notes coincides with calendar Q2) to $18.63 per share. That implies a sequential increase of 43% from the midpoint of fiscal Q3’s earnings-per-share guidance of $13.00.

Despite the expected growth, the article says SanDisk trades at 13.8 times forward earnings—well below the 20 times average forward earnings multiple of the S&P 500 index. It argues that SanDisk’s market-beating earnings growth supports a higher valuation than the stock currently reflects.

Potential Q2 outcome

Overall, the article concludes that SanDisk’s combination of supply-constrained NAND flash demand, rising contract prices, and strong earnings momentum could help it sustain “red-hot” performance in Q2 and potentially outperform other AI-related stocks during the quarter.