Should You Buy Sandisk Before Its 8-for-1 Stock Split on Nov. 19?

Sandisk (SNDK -5.59%) is set to undergo an 8-for-1 stock split on November 19, which will result in a much lower share price. While stock splits can generate some investor interest, they do not fundamentally alter a company's value. Investors should instead concentrate on the underlying business. Despite this upcoming split, Sandisk stock appears to be an excellent purchase based on its fundamentals.

The rationale behind stocks performing better after splits is straightforward: companies typically split their shares after substantial share price increases, and when management anticipates continued elevated prices. This usually indicates a successful business, leading to sustained success. Sandisk's future looks promising. The company manufactures NAND memory, employed in various devices like smartphones and solid-state drives (SSDs).

Currently, the primary demand for NAND memory stems from data centers, which necessitate vast data storage for AI model training, inference, and user prompt histories. Due to a global memory chip shortage, NAND memory prices have surged. Sandisk's revenue growth has been exceptional, driven by this memory chip scarcity. Although Sandisk's revenue growth may slow in the coming year, the company's business remains strong due to the magnitude of the AI expansion.

This will enable Sandisk to repurchase shares, enhancing earnings per share. With SANDK stock currently trading at a low valuation, repurchasing shares could be advantageous. Considering the data center build-out is expected to persist until at least 2030, Sandisk has ample time to repurchase substantial shares and strategically adjust its business model for long-term benefits from this booming sector.

While Sandisk may have had a strong 2026, its future appears just as bright. Although this might be the last stock split Sandisk undergoes for an extended period, investors can capitalize on this opportunity by purchasing shares now. The Motley Fool's Stock Advisor has a remarkable average return of 823% compared to the S&P 500's 209%.

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