SanDisk is a buy: NAND/SSD AI demand plus a nearly 23% fall leave P/E near 6, over 70% below the sector; the China selloff misreads CXMT, which makes DRAM, not NAND. Sales rose over 370%, margins nearly 85%, and $94 billion of contracted revenue protects the long term, even if 2029 supply normalization is uncertain.

We begin with our first choice, SanDisk, its stock market symbol is SNDK. To understand why this opportunity exists, one must first understand its position within the artificial intelligence system.

Frankly, I think many individual investors make the same mistake of grouping all types of memory together. But in reality, SanDisk is a company that specializes in NAND flash memory and SSD hard drives.

In short, we have these massive repositories of AI data, which contain petabytes of training data that AI models are fed with at lightning speed . This infrastructure is entirely based on SSD drives, such as those offered by SanDisk.

However, despite its crucial importance to this artificial intelligence infrastructure, its stock price has fallen sharply over the past month. The company has already lost nearly 23% of its value, and its value has fallen by almost half since its peak.

This has led to its valuation falling to one of its lowest levels ever, with an expected price-to-earnings ratio of just 6, more than 70% lower than the sector average, and a price-to-growth ratio of just 0.2, also 86% lower than the sector average.

It's astonishing how low this rating is. Again, much of this decline is due to the traditional cyclical panic we talked about earlier, as well as the increasing news coming out of China about new memory companies that pose a threat.

In short, the market saw headlines talking about China's competition in the memory sector, panicked, and began selling off shares in the entire sector.

But here's the important thing: the most prominent of these emerging threats is a company called CXMT, which develops DRAM chips. But SanDisk does not manufacture DRAM chips at all. SanDisk manufactures NAND flash memory .

Looking at its latest earnings, we find that the demand for its products remains very high. Sales increased by more than 370% year-on-year, driven mainly by data center revenues which saw tremendous growth of nearly 1300%, while the edge computing sector also rose by nearly 400%.

Profit margins also rose from 26% a year ago to nearly 85%, while earnings per share jumped from just 29 cents to more than $39 per share. It is truly amazing considering the scale of growth the company has achieved .

Most importantly, how SanDisk reduces the risks to its future by ensuring the loyalty of major customers at predetermined prices. In other words, regardless of sector fluctuations, SanDisk is holding onto its current high prices, but for the future.

The result is securing a minimum contracted revenue of $94 billion at high prices. This is a huge asset they can rely on in the long term, even if prices start to fall in the future.

Thanks to this, they were able to repurchase large quantities of their shares , having already spent $4.5 billion, in addition to $1.5 billion earmarked for future repurchase operations.

Even looking ahead to 2029, when analysts predict supply levels will return to normal, which is uncertain, SanDisk will still generate $57 billion in sales. For comparison, their average sales have been only about $6 to $7 billion over the past three years.

That is, this figure is about $50 billion higher than that. Currently, their average profit margins are less than 30%, but they will rise to 80%. Their average net income is negative, but they will now generate $37 billion from this income.

However, the price-to-earnings ratio will drop from over 14 to around 5. These are truly exceptional values.

In other words, even with a possible future decline, this company and its stock will remain far ahead, in a much better position than they were before the AI boom, and at a much lower valuation, thanks to tremendous growth and a lower stock price.

It's truly amazing, and that's why I feel the market is still unaware of so many of these opportunities, and that's why I'm so impressed with SanDisk.