TLDR
- Melius Research initiated coverage on Sandisk with a buy rating and a $1,350 price target
- Cantor Fitzgerald raised its target to $1,400; Morgan Stanley lifted its to $1,100
- NAND average selling prices could rise 70–90% sequentially in early 2026
- Supply constraints in NAND are expected to keep the market tight through 2027–2028
- Morgan Stanley forecasts gross margins approaching 80% and earnings well above consensus
Sandisk closed last week at an all-time high near $990 and has kept the momentum going. The stock jumped over 7% on Monday, touching $1,063, after a wave of analyst upgrades and raised price targets hit the tape.
Melius Research kicked things off, initiating coverage with a buy rating and a $1,350 price target. That implies around 36% upside from where the stock was trading late last week.
Cantor Fitzgerald and Morgan Stanley also moved on the stock. Cantor lifted its target to $1,400, while Morgan Stanley raised its to $1,100, both citing stronger-than-expected fundamentals in the memory market.
The core argument from all three firms is the same: NAND memory pricing is surging, supply is tight, and demand from AI data centers isn’t going anywhere soon.
Industry data points to NAND average selling prices rising as much as 70–90% sequentially in early 2026. That kind of pricing power is rare in semiconductors, and analysts think it’s driving a major earnings uplift for Sandisk.
Morgan Stanley now expects gross margins approaching 80% and forecasts 2026 and 2027 revenues well above current Wall Street consensus. The firm also expects Sandisk to deliver another earnings beat in its upcoming results.
Melius framed the bull case around a structural shift in demand. The firm argues that high-bandwidth memory, which works alongside AI chips, is still in the early stages of a long growth cycle that could run “through the end of the decade.”
The typical concern with memory stocks is the cycle. Semiconductor demand tends to boom and bust, and investors have been slow to pay higher multiples for Sandisk because of it.
What’s Keeping Supply Tight
While DRAM manufacturers are adding capacity — including by converting some NAND facilities — there is very little new cleanroom investment going into NAND specifically. That supply gap is expected to keep the market tight at least through 2027–2028.
Hyperscale cloud providers, consumer device makers, and enterprise clients are all competing for the same constrained pool of NAND supply. That’s a sold-out market, and pricing reflects it.
One longer-term development analysts are watching is the rise of long-term agreements between memory suppliers and customers. Similar LTA structures have already reshaped DRAM pricing dynamics with Micron and Samsung. If NAND follows the same path, it could bring more pricing stability and smoother earnings for Sandisk going forward.
Valuation Still Looks Cheap
Sandisk spent three years losing money before turning profitable this year. Consensus estimates put 2026 earnings at around $41.75 per share, growing to over $107 in 2027. Even in 2030, forecasts have earnings staying above $43 — more than the company may earn this year.
At under 25 times earnings, the stock still looks cheap relative to where those estimates sit. Morgan Stanley noted Sandisk trades at a discount to Micron on a forward cash flow basis.
Investors will be watching for upcoming earnings results, any LTA announcements, and capital allocation plans including buybacks as cash flows accelerate.
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