Palantir shares are up 135% and Sandisk shares are up 559% in 2025 as artificial intelligence deals continue to drive the market.
Palantir is a leader in artificial intelligence and machine learning platforms, but it’s also one of the most expensive software stocks in history.
SanDisk is a major beneficiary of the flash memory supply shortage caused by the construction of artificial intelligence infrastructure, but its stock price is expensive.
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this S&P 500 Index(SNPINDEX:^GSPC) It grew 16% last year as artificial intelligence trade continues to drive the market. Palantir Technology(NASDAQ: PLTR) The return was 135%, ranking ninth in the index. and SanDisk(NASDAQ: SNDK) The return rate was 559%, the best performance in the index.
Interestingly, while artificial intelligence will undoubtedly be a major investment theme in 2026, Wall Street expects Palantir and Sandisk stock prices to move in opposite directions, with one rising and the other falling.
Among 29 analysts, the median price target for Palantir is $200 per share. This represents a 17% upside potential from its current share price of $171.
Among 24 analysts, Sandisk has a median price target of $317 per share. This means there is room for a 23% downside from its current share price of $414.
The consensus estimates listed above mean investors should buy Palantir and sell Sandisk. Here are the important details.
Image source: Getty Images.
Palantir builds data analytics and artificial intelligence (AI) platforms for clients in the public and private sectors. Its main differentiator is that its ontology-based software means its products are built around a decision-making framework with machine learning (ML) models that become more effective over time. Use cases range from retail demand forecasting and supply chain management to hospital resource allocation and battlefield analysis.
2024, forrest research corp. Palantir ranks Palantir as the best AI/ML platform in terms of current capabilities and growth strategy, scoring higher than similar products from other companies letter, Amazonand Microsoft. Analysts commented: “Palantir is quietly becoming one of the largest players in this market.” In 2025, Forrester recognized Palantir as a leader in artificial intelligence decision-making platforms.
The problem with Palantir is valuation. Its shares currently trade at 117 times sales, making it the most expensive company in the S&P 500 by multiples. In fact, Palantir could be down 65%, but it would still be the most expensive stock in the index. Few software companies have a price-to-sales ratio above 100, and none can sustain such a high valuation indefinitely.
What does this mean for investors? Palantir stock is likely to continue rising in the coming months, as Wall Street expects, but the risk-reward profile is tilted toward risk. This means the stock could drop significantly for a variety of reasons, including reasons that are not company-specific, such as related to economic data. I think investors should avoid this stock, or at least keep their positions small.
Sandisk designs and manufactures data storage solutions based on NAND flash technology. The company achieved cost efficiencies and supply chain security through a joint venture with Japanese flash memory maker Kioxia, with which it shares research and development (R&D) expenses and capital expenditures related to process technology development and memory wafer production.
Sandisk is the fifth-largest supplier of NAND flash technology, but the company gained one percentage point of market share in the first half of 2025, and that momentum is likely to continue. Two hyperscalers recently began testing their solid-state drives (SSDs), while a third hyperscaler and major storage original equipment manufacturer (OEM) plans to begin testing its SSDs this year.
Sandisk reported financial results for the first quarter of fiscal 2026 (ending October 2025), with both revenue and profit beating expectations. Revenue increased 23% to $2.3 billion, driven by strong sales growth in the data center and edge (PCs and mobile devices) segments. However, non-GAAP (generally accepted accounting principles) earnings fell 33% to $1.22 per diluted share.
Importantly, management expects second-quarter non-GAAP earnings to nearly triple from the prior quarter. The construction of artificial intelligence data centers requires fast and energy-efficient flash storage, resulting in an unprecedented shortage of memory supply (including but not limited to NAND flash memory), leading to a significant increase in prices.
Wall Street expects Sandisk’s adjusted earnings to grow 79% annually through fiscal 2029. That makes the current valuation of 170 times earnings look very expensive, especially since Wall Street may be overestimating future earnings. It is known that the demand for memory chips is cyclical, and JPMorgan Chase Analysts believe the tight supply environment suggests the current cycle is nearing its peak.
In fact, NAND flash memory sales are expected to grow at an annual rate of 14% through 2030, according to Grand View Research. This implies that the company’s earnings are growing at a much slower pace than Wall Street forecasts, in which case the market may assign SanDisk a lower P/E ratio. I think the stock is too hot and is already up 74% in January after rising 559% in 2025. Shareholders with large positions should consider reducing their holdings.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine works at Amazon and Palantir Technologies. The Motley Fool holds and recommends Alphabet, Amazon, JPMorgan Chase, Microsoft and Palantir Technologies. The Motley Fool recommends the following options: Long January 2026 Microsoft calls at $395 and short January 2026 Microsoft calls at $405. The Motley Fool has a disclosure policy.
Palantir Stock vs. Sandisk Stock: Buy One and Sell the Other, Wall Street Says Originally Posted by The Motley Fool
