Here’s a quiz question for you. Which S&P 500 company delivered the highest stock gains, percentage-wise, in 2025? The correct answer isn’t NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), believe it or not.
In actuality, the winner is a company that most investors don’t think about very often. At the same time, it’s a technology hardware firm that’s benefiting from a wave of interest in memory chip stocks.
So now, it’s time to reveal last year’s S&P 500 top performer. Along with that, we’ll consider whether this stock could stage another spectacular rally in 2026.
A Memorable Year for Memory Makers
The hottest commodity in 2025 wasn’t just artificial intelligence (AI) chips in general. It was much more specific than that, and there were clear winners in this trend.
Let’s see if you can figure out the trend. In 2025, the three biggest stock gainers in the S&P 500 were Micron (NASDAQ:MU) with around 250%, Western Digital (NASDAQ:WDC) with almost 300%, and Sandisk (NASDAQ:SNDK) with nearly 600%.
To be more precise, SNDK stock gained approximately 580% last year, which is astounding no matter how you slice it. And in case you didn’t see the connection, the three top performers are all involved in the market for memory-storage hardware.
As you can see, it was a banner year for memory makers. This may be a problem for the technology hardware market overall, but it’s been a major boon for certain memory chip producers.
In December 2025, IDC warned that the “global semiconductor ecosystem is experiencing an unprecedented memory chip shortage.” Furthermore, this shortage could impact “device manufacturers and end users… well into 2027.”
IDC also observed that dynamic random access memory (DRAM) prices have “surged significantly as demand from AI data centers continues to outstrip supply.” This dynamic has created what IDC called a “supply/demand imbalance” in late 2025.
NVIDIA CEO Points to “Unserved Market”
When NVIDIA CEO Jensen Huang speaks, people listen. At the recent 2026 CES technology conference, Huang make head-turning remarks that Sandisk’s investors will be glad to hear.
At the conference, Huang characterized the memory storage market as a “completely unserved market today.” Of course, that’s an exaggeration as this market is served, to a certain extent, by Micron, Western Digital, and Sandisk.
Huang also proclaimed that the memory storage market will “likely be the largest storage market in the world, basically holding the working memory of the world’s AIs.” He didn’t provide a time frame for this, though it’s probably safe to assume that Huang expects this trend to at least persist through the end of 2026.
Despite the possible exaggeration, Huang’s point is duly noted. From personal computers (PCs) to smartphones and AI data centers, plenty of devices and machines will need memory storage upgrades in the next 12 months.
As you might expect, Huang’s remarks gave Sandisk stock a boost. So far, it appears that SNDK stock’s upward momentum from 2025 could continue without stopping. But then, as we’ll discuss now, January 2026 might be a good time for Sandisk’s shareholders to start taking profits.
Still Some Proving to Do
Despite the Huang-fueled hype, Sandisk still has some proving do to. The company is a revenue grower, but Sandisk needs to demonstrate that it’s also an income grower.
Here’s the good news and the not-so-good news. The good news is that Sandisk grew its net revenue from $1.883 billion in the quarter ended September 27, 2024, to $2.308 billion in the quarter ended October 3, 2025.
The bad news, though, is that during the same time period, Sandisk’s net income shrank from $211 million to $112 million. In other words, the company’s net profits were practically cut in half in a year’s time.
Going forward, Sandisk should focus on reducing its “cost of revenue” as well as its operating expenses. These categories of expenditures markedly increased year-over-year for Sandisk in the quarter ended October 3, 2025.
It might sound like I’m nitpicking if I expect Sandisk to demonstrate net profit growth. Yet, it’s reasonable to have high expectations for a company when its stock just rallied 600%.
It’s Fine to Take Profits
Sure, SNDK stock has the potential to continue rallying throughout 2026. After all, the CEO of NVIDIA just warned everyone about a memory storage device shortage.
It’s possible, however, that this shortage is already known and priced into Sandisk stock. This would explain how the stock could have beaten every other S&P 500 stock in 2025.
Consequently, until Sandisk proves that it’s an income grower as well as a revenue grower, I’m not taking a position in SNDK stock. If you’re fortunate enough to have gained hundreds of percentage points on your Sandisk share position, it’s not a terrible idea to book some profits and monitor your position carefully from now on.
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