Here's an interesting twist in the S&P 500 inclusion sweepstakes: SanDisk Corporation (SNDK) might be about to crash Strategy Inc.'s (MSTR) party. Both companies are vying for a spot in the benchmark index, but SanDisk's meteoric rise is creating what one analyst calls an "elephant in the room" problem that could reshape the entire decision.

When You're Too Big for the Small-Cap Club

SanDisk has grown so explosively in 2025 that it's become almost comically oversized for its current home in the S&P small-cap index. With a market capitalization hovering around $40 billion, the memory chip maker now dwarfs its small-cap peers by such a margin that its promotion to the big leagues seems nearly inevitable, according to Melissa Roberts, an analyst at Stephens, Inc., speaking with MarketWatch.

The numbers tell a wild story. SanDisk's stock has rocketed an eye-watering 585% over the past six months, propelled by a perfect storm of supply constraints in the memory chip industry and surging demand from data centers and AI applications. That kind of growth doesn't just turn heads—it forces index committees to pay attention.

Roberts highlighted that this presents a complicated scenario for Strategy (MSTR), the company formerly known as MicroStrategy. Strategy just became eligible for S&P 500 inclusion this quarter, but SanDisk's outsized impact on the small-cap index could push it to the front of the line when the S&P Dow Jones Indices conducts its quarterly rebalancing on December 5.

The Waiting Game

There's a catch, though. SanDisk's share price has turned exceptionally volatile amid the AI-fueled frenzy in memory and storage stocks. Roberts suggested the index committee might adopt a "wait and see" approach, letting SanDisk prove its market value and recent gains can hold steady before pulling the trigger on inclusion. After all, nobody wants to add a stock to the S&P 500 only to watch it crater a month later.

Memory Chips vs. Bitcoin Bets

The diverging fortunes of these two companies reveal a lot about current market dynamics. SanDisk's surge stems from fundamental industry shifts—specifically, a supply shock triggered by Samsung's aggressive price hikes in the memory chip market. This has created a favorable environment not just for SanDisk, but also for competitors like Micron Technology Inc. (MU).

SanDisk backed up its stock performance with solid financials, delivering upbeat Q1 results that included sales of $2.31 billion and net income of $112 million. The company's strong demand across data center and consumer markets signals a successful strategic pivot following its separation from Western Digital.

Strategy, meanwhile, is experiencing the opposite trajectory. The company's fortunes remain tightly linked to Bitcoin's performance, and crypto-linked stocks have been under pressure as traders question whether Bitcoin's traditional four-year halving cycle is losing its predictive power or breaking down entirely. That uncertainty has weighed on Strategy's stock precisely when it needs momentum for S&P 500 consideration.

What Happens Next

The December 5 rebalancing will reveal whether the index committee views SanDisk's explosive growth as sustainable enough to warrant immediate inclusion, or whether volatility concerns give Strategy an opening. Either way, SanDisk's remarkable transformation from a small-cap player to a $40 billion behemoth in such a short timeframe represents one of the more dramatic shifts in the semiconductor space this year.

On Monday, SanDisk stock climbed 4.61% to close at $265.88, continuing its impressive run and reinforcing its case for promotion to the major index.