The memory and storage segment of the semiconductor sector is in the midst of a powerful boom, fueled by the artificial intelligence (AI) infrastructure build-out. With hyperscalers and others pouring hundreds of billions of dollars into new data centers, demand for high-capacity solid-state drives (SSDs) is far outpacing the world’s capacity to manufacture them. As a leading producer of NAND flash storage and enterprise SSDs, Sandisk (SNDK +0.07%) has been one of the clearest beneficiaries of this movement.

So far this year, Sandisk stock has surged 873% — making it the top-performer in the Nasdaq-100 by a wide margin. While such gains might suggest to some that Sandisk’s rally has become overdone, a close look at the company’s…