Down 35% From Its High, Is Sandisk Stock a Screaming Bargain in September?

Sandisk (SNDK) has seen a significant decline of around 35% since its late June highs, but some analysts argue this may present a bargain opportunity in September. The chipmaker's rapid growth has been driven by a memory chip shortage caused by the ongoing AI data center buildout. Despite not changing its input costs, Sandisk has benefited from soaring prices, resulting in a 51% quarterly revenue increase.

Most companies would be thrilled to grow at a 51% rate in a year-over-year comparison. Sandisk grew more than 50% in just three months, with two-thirds of the gain coming from higher prices. Given that demand for memory chips is not expected to decrease soon and the production capacity increase will take years, the market conditions that drove Sandisk's stock higher are likely to persist.

At seven times forward earnings, the current market conditions make Sandisk an attractive investment opportunity with the potential for significant returns over the next year. However, it is worth noting that the 10 best stocks identified by The Motley Fool Stock Advisor analyst team did not include Sandisk.