The memory maker's stock is up 535% this year, but it's also newly profitable and still trades at just seven times forward earnings.
SanDisk's board authorized an additional $14 billion in share repurchases, lifting the company's total remaining buyback capacity to $15.5 billion, an amount equal to more than 7% of its current market capitalization. The company, spun off from Western Digital in February 2025, has committed to returning 100% of its excess cash to shareholders going forward.
The timing invites an obvious question. SanDisk's stock is up 535% so far this year, the kind of run that ordinarily raises the question of whether a company is buying back its own shares near a high rather than at a discount. Warren Buffett has argued for decades that repurchases only make sense below a company's intrinsic value, writing that "what is sensible at a discount to business value becomes stupid if done at a premium," and warning separately that "blindly buying an overpriced stock is value destructive." Buffett's framing is a general principle about buybacks; it was not made about SanDisk specifically, and nothing here suggests the company's board ignored price when it acted.
What complicates a simple buying-high read is the company's underlying numbers. Net income swung from a loss of $1.6 billion in fiscal 2025 to a profit of $11.4 billion in fiscal 2026, and even after this year's rally, the stock trades at roughly seven times forward earnings. Management is guiding to mid-teens revenue and earnings growth alongside gross margins near 80%. A stock can rise 535% and still be inexpensive if the earnings underneath it grew even faster, and that looks closer to what happened here than a story of a board buying back shares purely because the price has been rising.
The open question is less about valuation than about discipline: whether a policy built around returning all excess cash, rather than a price-sensitive repurchase framework, still looks reasonable if the memory chip cycle that produced this year's earnings swing eventually turns down.