It's been a year since the companies broke apart and let Wall Street better assess the AI-fueled demand for both businesses.

One year after breaking into two separate businesses, Western Digital and SanDisk Corp. have both delivered dazzling stock performances fueled by insatiable artificial-intelligence demand for memory and storage products.

Would that still be the case if the companies remained as one? Western Digital CFO Kris Sennesael doesn't quite think so.

Both companies are currently closing in on $100 billion market capitalizations, and Sennesael told MarketWatch that he doubts a combined Western Digital would be near the $200 billion mark if the companies were still one. On the final trading day before the separation, the combined entity had a market cap just south of $24 billion, according to Dow Jones Market Data.

Since the official split on Feb. 24, 2025, shares of Sandisk have soared 1,271%. Western Digital, which has since rebranded to WD, has seen its shares rise 472% in that period.

Breaking away the company's flash-storage unit from its hard-disk-drive business is "really working," according to Sennesael. "By separating those businesses, a lot of value has been created and a lot of value has been unlocked."

The hope behind the spinoff was to help investors better focus on the value of Sandisk, which seemed to be getting lost in a bigger business, Wedbush analyst Matt Bryson told MarketWatch. Sandisk had been a drag on Western Digital's earnings, he said, because the NAND flash memory market is more volatile than the hard-disk-drive market both in terms of demand and pricing. And manufacturing hard drives is less capital-intensive, Bryson added.

"Back when the spinoff happened, Sandisk was effectively losing money," Bryson said.

The company posted a GAAP net loss of $1.6 billion in its most recent June-ended fiscal year, after taking a large impairment charge. This fiscal year, analysts tracked by FactSet expect the company to post $5.3 billion in GAAP net income, and they see that amount more than doubling for fiscal 2027.

Now, Sennesael said, Western Digital can better focus on its hard-disk-drive business and develop stronger customer engagements with "a much cleaner story that is easy to articulate."

Investors will likely be more appreciative of having better insight into each business, Bryson added.

That said, part of why the split has worked out so well is that both companies have benefited from something no one really saw coming, he noted. Or at least, people didn't see the trend playing out to such a dramatic extent.

At the time of the split, storage makers were not adding capacity at the rate that was eventually demanded, Bryson said. As AI-driven demand grew rapidly between June and September, however, companies like Sandisk found themselves in short supply, and therefore, with a lot of pricing power for hot commodities like NAND memory. Bryson said this favorable environment will continue into at least 2028.

That supply crunch has not only been a boost to Sandisk and Western Digital, but also to other memory and storage suppliers such as Micron Technology and Seagate Technology. The shortages have allowed companies to raise average selling prices and make long-term agreements with customers.

Some aren't so certain that Sandisk's good times will continue. Citron Research, led by activist short seller Andrew Left, said in a Tuesday post on X that the firm is shorting Sandisk, saying the memory cycle is starting to peak.

"The market is pricing SanDisk like it's [Nvidia]," the firm wrote. "There's one problem: Nvidia has a moat. SanDisk sells a commodity."

Citron pointed to a report saying that memory leader Samsung Electronics will focus on producing higher-value products that will deliver 50% profit margins, and is moving into the higher end of the market for solid-state drives, which depend on NAND flash memory.

Sandisk's stock slid 4.2% on Tuesday, with the report marring the first anniversary of the split. Western Digital shares fell 3.5%.

If Sandisk and Western Digital were still a single entity, the respective business units would have the same revenue potential that they do now, in Bryson's view. But from a stock perspective, he said it's not clear that markets would have reacted as positively as they have in the current scenario.

"I think investors like the better visibility into the businesses, and to some extent you get rewarded for that," Bryson said.