SanDisk's Solo Run, Up 800% in H1... Why Wall Street Picked Nvidia for H2?

▲ Why Wall Street picked Nvidia for the second half?/Photo: AI generated image

In the first half of 2026, the US stock market continued its robust rally, rising by approximately 10%, but individual stock performance showed extreme polarization.

The stock with the highest return in the S&P 500 index during the first half was SanDisk (SNDK), a major beneficiary of the artificial intelligence (AI) data center boom, which surged by nearly 800%. In contrast, Intuit, which performed the worst, plunged by 60%, creating a stark contrast.

Wall Street has put forth a bold outlook, suggesting that while SanDisk's solo run amid an unprecedented shortage (supply shortage) might continue into the second half, Nvidia (NVDA), the market cap leader which has been consolidating throughout the first half, will achieve an unprecedented turnaround in the second half and reclaim its throne.

According to the investment media outlet The Motley Fool on July 3 (local time), the driving force behind SanDisk's dominance in the first half of the stock market was an unprecedented memory semiconductor supply shortage triggered by the expansion of global artificial intelligence infrastructure.

Currently, the biggest bottleneck shaking the data center market is not power or land, but 'memory chips,' and the industry generally believes that this supply shortage will be difficult to resolve not only in 2026 but also in 2027. Although SanDisk shares closed down 14.13% at $1,745 (market capitalization $258 billion) in Wednesday's trading, entering a period of consolidation, it is expected to maintain its top position in the second half thanks to the continued strong demand in the upstream market.

However, in terms of the 'explosiveness of returns' in the second half, there is another candidate that truly deserves attention. Wall Street experts are convinced that Nvidia, which was thoroughly sidelined in the first half with a mere 5% increase, will be the protagonist of the second half.

The investment thesis for Nvidia is very clear. Even though AI infrastructure spending is certain to enjoy a long boom beyond 2027, Nvidia's current stock price does not reflect any growth premium beyond 2026.

In fact, Nvidia is currently trading at a 12-month forward PER of 21.5x, which is unusually identical to the average multiple of the S&P 500 index for a leading tech stock. Furthermore, based on estimated earnings for next year (2027), its PER falls to 15x, placing it in an extremely undervalued territory.

Considering Nvidia's historical trend of closing with a forward PER of over 40x at the end of each year over the past two years, if its multiple normalizes driven by accelerated AI spending, it could unleash powerful momentum, with its stock price surging by nearly 100% (doubling assets) within the second half. For investors seeking portfolio diversification and overwhelming excess returns in the second half, Nvidia currently represents the most attractive allocation of funds.

■3-Line Key Summary

In the first half of 2026, SanDisk (SNDK), the biggest beneficiary of the memory semiconductor shortage, recorded the best performance within the S&P 500 index, surging by approximately 800%.

In contrast, Nvidia (NVDA), the global market cap leader, was thoroughly sidelined in the market, rising by only 5% in the first half despite the continued boom in AI infrastructure.

However, Nvidia's current forward PER is 21.5x, the same as the index average (15x based on next year's estimates), placing it in an extremely undervalued range. Therefore, there is a very high possibility of a 100% rally in the second half if its multiple normalizes by year-end.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*