Sandisk (SNDK) Stock Soars 7% Following Multiple Analyst Upgrades on NAND Pricing Strength

TLDR

• Melius Research launched coverage with a buy recommendation and $1,350 price objective
• Cantor Fitzgerald increased its price target to $1,400; Morgan Stanley boosted theirs to $1,100
• NAND pricing projected to climb 70–90% sequentially in Q1 2026
• Limited NAND capacity additions expected to maintain tight market conditions into 2027–2028
• Morgan Stanley anticipates gross margins near 80% with earnings significantly exceeding Street estimates

Sandisk shares finished the previous week at record levels around $990 and continued their upward trajectory. The memory chipmaker’s stock surged more than 7% during Monday’s session, reaching $1,063, following a series of positive analyst reports and elevated price targets.

Sandisk Corporation, SNDK

Melius Research led the charge by launching coverage with a buy recommendation and establishing a $1,350 price objective. This target represents approximately 36% potential upside from the stock’s late-week trading levels.

Both Cantor Fitzgerald and Morgan Stanley joined the bullish chorus. Cantor elevated its price target to $1,400, while Morgan Stanley increased its objective to $1,100, with both firms highlighting improving fundamentals across the memory semiconductor sector.

The central thesis driving these upgrades remains consistent across all three research houses: NAND flash memory pricing is experiencing significant appreciation, available supply remains constrained, and artificial intelligence data center demand continues expanding.

Industry projections indicate NAND average selling prices could increase by 70–90% on a sequential basis during the first quarter of 2026. This magnitude of pricing strength is uncommon in the semiconductor industry, prompting analysts to forecast substantial earnings growth for Sandisk.

Morgan Stanley’s updated model now projects gross margins climbing toward 80%, with revenue forecasts for 2026 and 2027 significantly exceeding current Street consensus figures. The investment bank also anticipates Sandisk will surpass earnings expectations in its next quarterly report.

Melius positioned its bullish perspective around a fundamental transformation in demand patterns. The research firm contends that high-bandwidth memory products, which complement AI processors, remain in the initial phases of an extended growth trajectory potentially lasting “through the end of the decade.”

The traditional skepticism surrounding memory stocks centers on cyclicality. Semiconductor demand historically follows boom-and-bust patterns, leading investors to assign lower valuation multiples to Sandisk despite recent momentum.

What’s Keeping Supply Tight

Although DRAM producers are expanding capacity — partly through repurposing certain NAND production lines — minimal new cleanroom capital expenditure is being directed toward NAND manufacturing specifically. This supply-demand imbalance is projected to sustain tight market conditions through at least 2027–2028.

Hyperscale cloud operators, consumer electronics manufacturers, and enterprise customers are all competing for limited NAND inventory. The sold-out market environment is reflected in current pricing dynamics.

A significant development analysts are monitoring involves the emergence of long-term supply agreements between memory manufacturers and buyers. Comparable LTA frameworks have already transformed DRAM pricing mechanisms for Micron and Samsung. Should NAND adopt similar contractual structures, it could establish greater pricing predictability and earnings consistency for Sandisk moving forward.

Valuation Still Looks Cheap

Sandisk endured three consecutive years of losses before returning to profitability in the current year. Consensus projections estimate 2026 earnings around $41.75 per share, expanding to over $107 in 2027. Even looking ahead to 2030, forecasts show earnings maintaining levels above $43 — exceeding this year’s expected results.

Trading below 25 times forward earnings, the stock appears undervalued relative to projected earnings power. Morgan Stanley highlighted that Sandisk trades at a discount to Micron when measured on a forward cash flow multiple basis.

Market participants will be monitoring the company’s upcoming earnings release, potential long-term agreement announcements, and capital deployment strategies including share repurchase programs as cash generation accelerates.

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