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

▲ Why Wall Street picked Nvidia for H2?/Photo: AI-generated image

In the first half of 2026, the U.S. stock market saw a solid rally, rising by approximately 10%, but individual stock performances 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 posted the worst performance, plunged by 60%, creating a stark contrast.

While Wall Street acknowledges the possibility of SanDisk's solo run continuing in the second half amid an unprecedented shortage (supply shortage), it has also put forth a bold prediction that Nvidia (NVDA), the market capitalization leader that has been consolidating throughout the first half, will achieve a historic turnaround in the second half and reclaim its throne.

According to the investment specialist media 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 caused by the expansion of global artificial intelligence infrastructure.

Currently, the biggest bottleneck shaking the data center market is 'memory chips,' not power or land, and the industry widely believes that this supply shortage will be difficult to resolve not only in 2026 but also in 2027. Although SanDisk's stock price plunged by 14.13% to $1,745 (market capitalization $258 billion) in Wednesday's trading, taking a breather, it is expected to comfortably maintain its top position in the second half thanks to continued strong demand in the frontend market.

However, when it comes to the 'explosiveness of returns' in the second half, there is a different candidate that deserves attention. Wall Street experts are confident that Nvidia, which was largely overlooked with only a 5% gain in the first half of this year, will become the protagonist in the second half.

Nvidia's investment thesis is very clear. Despite the certainty that AI infrastructure spending will enjoy a long-term boom until after 2027, Nvidia's current stock price does not reflect any growth premium beyond 2026.

Indeed, Nvidia is currently trading at a 12-month forward P/E ratio 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 P/E ratio drops to 15x, placing it in an extremely undervalued territory.

Considering Nvidia's historical trend of closing each year-end with a forward P/E ratio of over 40x in the past two years, if its multiple normalizes driven by accelerating 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 significant excess returns in the second half, Nvidia is currently the most attractive allocation.

■3-Line Key Summary

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

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

However, Nvidia's current forward P/E ratio of 21.5x (15x based on next year's estimates) is identical to the index average, 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.*