Up 1,479%, Wall Street Sees Sandisk Hitting $1,000

It was almost exactly one year ago that Sandisk (NASDAQ:SNDK | SNDK Price Prediction) was spun off from Western Digital (NASDAQ:WDC) as a standalone business. In the 12 months since, its stock has soared 1,479% amid surging demand for flash memory products. 

Shares are climbing another 14% this morning to around $659, after a Wall Street analyst raised his price target on Sandisk stock from $580 to $1,000 per share, citing its robust growth prospects. With AI fueling relentless storage needs, is there any stopping Sandisk’s momentum?

Earnings Surge Signals Strength

Sandisk’s fiscal second-quarter results that were released last week far exceeded expectations across key metrics. Revenue reached $3.03 billion, up 31% sequentially and 61% year-over-year from $1.88 billion. Non-GAAP earnings hit $6.20 per share, significantly beating the consensus estimates. 

GAAP net income soared to $803 million, a 672% increase from $104 million a year ago; gross margins expanded to 51.1%, reflecting higher pricing and a favorable product mix; and free cash flow jumped over 1,000% year-over-year. Third-quarter guidance calls for $4.4 billion to $4.8 billion in revenue and $12 to $14 in non-GAAP EPS, also far above consensus estimates and signaling continued acceleration for Sandisk. With non-GAAP gross margins projected at 65% to 67%, it underscores the memory maker’s pricing power and cost efficiencies.

AI Boom Powers Phenomenal Growth

The growth stems from explosive demand for NAND flash and enterprise SSDs in AI infrastructure. Data center revenue climbed 64% sequentially to $440 million, driven by AI builders and hyperscalers. Edge revenue grew 63% year-over-year to $1.68 billion, while consumer revenue rose 52% to $907 million. Tight NAND supplies amid accelerating demand pushed average selling prices up in the mid-30% range. 

CEO David Goeckeler noted AI’s step change in demand, with data center exabyte growth forecasted in the high 60% range for 2026. Supply strains are expected to persist beyond 2026, supporting sustained pricing power. Management also highlighted that demand exceeds supply well into the future, with AI inference workloads requiring massive KV cache storage — potentially adding 75 to 100 exabytes in 2027 alone. The company extended its NAND supply agreement with Kioxia through 2034 for long-term capacity security.

Wall Street’s Bold $1,000 Bet

Bernstein analyst Mark Newman nearly doubled his price target on Sandisk to $1,000 from $580, maintaining an outperform rating. He based this on fiscal 2027 earnings of $90.96 per share at an 11x multiple. This implies roughly 52% upside from recent levels around $659. 

Newman sees unprecedented NAND price rebounds and a super-profitability cycle, with 2027 gross margins potentially reaching 75%. Structural demand from edge AI and decentralized inference positions Sandisk for long-term gains over cyclical peers. The analyst projects $13.8 billion in 2027 free cash flow — 195% above consensus estimates — underscoring the company’s shift to a high-margin enterprise and data center focus. The upgrade followed the “significant beat and guide” that highlighted a very strong pricing environment.

Key Takeaway

AI’s growth is causing a surge in demand for memory, and Sandisk is operating at top capacity, with management confirming an inability to fully meet orders amid ongoing shortages that analysts expect to last until at least 2028. 

Certain periods create opportunities that expand far beyond the initial spark. Where AI was what lit the fuse that initially sent Nvidia (NASDAQ:NVDA) soaring, we are now seeing the ripple effects from it — spreading to critical enablers like high-density storage for training and especially inference. 

Investors need to broaden their lens to look for investments beyond just the traditional chipmakers, and Sandisk is now one stock that should command the sort of attention once reserved for Nvidia.