NVIDIA vs. Sandisk: Which AI Stock Could Deliver Bigger Returns?

As artificial intelligence (AI) reshapes the technology landscape, both NVIDIA Corporation NVDA and a much smaller company, Sandisk Corporation SNDK, have benefited from the transformative trend. But which AI stock provides greater upside potential in the future? Let’s take a closer look –  

The Bullish Case for NVDA Stock 

Strong demand for NVIDIA’s cutting-edge AI chips and platforms is driving revenue growth. For the fiscal first quarter of 2027, NVIDIA’s revenues were $81.6 billion, up 85% year over year and 20% sequentially, according to the company’s press release.  

NVIDIA’s data center revenues hit a record $75.2 billion, up 92% year over year and 21% quarter over quarter. NVIDIA’s dominance in the data center business indicated that spending on AI infrastructure was strong, and cloud providers invested heavily in the company’s graphics processing units. 

Management further expects AI demand to remain robust, as they project NVIDIA’s fiscal second-quarter 2027 revenues to come in at $91 billion, plus or minus 2%. But NVIDIA isn’t just increasing sales; it’s also maintaining a healthy profit margin. NVIDIA expects its non-GAAP gross margin to be 75%, plus or minus 0.5% in the fiscal second quarter, unchanged from the 75% reported in the fiscal first quarter. 

The Bullish Case for SNDK Stock 

Sandisk has successfully expanded its presence among high-value customers as demand for its AI-related memory solutions continues to grow. A favorable pricing environment is further supporting its growth prospects, making it a desirable AI memory investment. 

For the fiscal third quarter of 2026, Sandisk’s revenues were $5.95 billion, up 97% quarter over quarter and well above its own expectations, according to investor.sandisk.com. The company further expects revenues to improve to $7.75 billion to $8.25 billion in the fiscal fourth quarter of 2026.  

The company’s earnings growth is also improving sequentially, with management projecting non-GAAP earnings per share of $30 to $33 for the fiscal fourth quarter compared with $23.41 in the fiscal third quarter.  

NVIDIA or SanDisk: Which AI Stock Has Greater Upside? 

NVIDIA’s strong data center growth, steady profit margins and upbeat outlook should act as a catalyst for the stock. But let’s admit that, so far, that hasn’t been the case. Since releasing its fiscal first-quarter earnings, NVIDIA’s stock has declined and is up a meager 4.9% year to date. This is because after years of exceptional growth, investors’ expectations for NVIDIA’s earnings are extremely high. They are also concerned that any slowdown in future AI spending could weigh on NVIDIA’s performance. 

While NVIDIA’s management expects to maintain a steady profit margin, current U.S. export curbs on chip sales to China have limited NVIDIA’s access to a potential market, creating pressure on margins. Additionally, geopolitical tensions could disrupt supply chains, giving NVIDIA little room for expansion.  

On the other hand, Sandisk’s latest quarterly results show that strong AI memory demand is driving revenue and profitability growth, supporting a positive share price outlook. Moreover, its multi-year strategic partnerships through New Business Model agreements in the fiscal third quarter are strengthening customer relationships, enhancing revenue visibility, and increasing the predictability of long-term cash flows, which supports further upside in its share price. 

Sandisk’s shares have already soared 457.4% this year, yet the company has more room for growth as it benefits from the AI memory boom, even as NVIDIA remains a dominant AI chip company. 

Brokers also see greater upside potential in Sandisk than NVIDIA. The average short-term price target for SNDK stock is $2,389.42, representing a 135.2% upside from its last closing price of $1,015.89. The highest price target stands at $3,169, suggesting a potential upside of 211.9%.

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The average short-term price target for NVDA stock is $305.85, implying a 61% upside from its last closing price of $190.01. The highest price target stands at $500, representing a potential upside of 163.1%.

Image Source: Zacks Investment Research

For now, both Sandisk and NVIDIA have a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

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