Sandisk (NASDAQ: SNDK) stock price remains in a long bull market this year, and is the best-performing company in the S&P 500 Index. It has soared by 505% this year and 4,118% since going public last year. 

Its performance has been so strong such that $10,000 invested in it 12 months ago would be worth over $400k. This makes it the best gainers in Wall Street. So, will the rally continue, or is the bull run coming to an end?

Sandisk stock has soared amid the rising memory demand

Sandisk is a top player in the technology industry and one of the top beneficiaries of the ongoing AI boom. Its products, which include SSDs, memory cards, USB flash drives, and embedded, have continued to experience robust demand in the past few years. 

This demand has pushed their prices higher, and analysts expect that its growth will accelerate in the coming years. Also, the hope is that memory prices will continue rising in the foreseeable future amid the artificial intelligence boom. 

The most recent financial results showed that revenue growth supercharged in the third fiscal quarter. It made $5.95 billion in revenue, up by 97% from the second quarter and 251% YoY. 

READ MORE: SanDisk stock slips: why this analyst still sees a 50% upside

This growth was largely driven by its booming data center business, whose revenue rose by 233%. It attributed the momentum to its higher volume and pricing.

Data center products have seen their revenues jump sharply in the past few months, such that companies like Microsoft, Google, Meta Platforms, and Amazon boosted their planned capital expenditures for the year to over $755 billion. Their boost was not because they plan to launch more sites. Rather, it is because of the rising prices.

Sandisk has continued to sign more deals as companies in the AI industry secure their supply. It ended the quarter with three New Business Model agreements and had already signed two in the fourth quarter. 

Analysts are optimistic that its business will continue to do well now that the management believes that it has hit its inflection point. The estimate is that its fourth quarter revenue will come in at $8.2 billion, up by 331% YoY. This will bring its annual revenue to $19.54 billion, up by 165% YoY. 

It will then make $42 billion in the next financial year, up by 116% YoY. This growth will be accompanied by its profits, with the earnings per share expected to move to $65 this year from the previous $2.99. It will make $175 in the next financial year.

Still, despite these rosy predictions, there is a risk that the company is getting overheated, which may lead to a reversal, especially if its memory prices start to ease.

SNDK stock price technical analysis

Sandisk stock chart | Source: TradingView

A closer look at the daily chart shows that the SNDK stock price is flashing red. That’s because it is slowly forming a small double-top pattern at $1,597 and a neckline at $1,276, its lowest point on May 18. 

A double-top is one of the most bearish signs in technical analysis. At the same time, the stock remains much higher than the 100-day moving average at $838. 

Therefore, there is a risk that the stock may pull back in the near term as investors start booking profits. This view will remain in place as long as it is below the double-top point at $1,597. 

A drop below the support at $1,276 will point to more downside in the near future. However, a move above the key resistance level at $1,597 will invalidate the bearish outlook, potentially to the key resistance level at $1,700.

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