TLDR
- Barclays upgraded SNDK to Overweight and raised its price target to $2,300 from $1,200
- SanDisk’s new contract structure includes $42 billion in minimum contractual revenue and $11 billion in financial guarantees
- The stock is up over 564% year-to-date and has gained more than 4,000% over the past 12 months
- The most bullish analyst on the Street, Melius Research’s Ben Reitzes, has a $2,350 price target
- Citi raised its price target to $2,025, up from $1,300, implying around 27% upside from current levels
Barclays upgraded SanDisk (SNDK) to Overweight on Tuesday and lifted its price target to $2,300 from $1,200, pointing to the company’s contract structure as a key reason for the call.
The stock jumped 7.5% on the day, trading around $1,589.55 ā close to its 52-week high.
Analyst Tom O’Malley said SanDisk has been the most aggressive and structurally innovative player in NAND contracting. That’s a big statement in a sector that hasn’t historically been known for demand predictability.
The contracts discussed at SanDisk’s most recent earnings vary in length, with some running out to 2031. Volume commitments increase over the life of each deal.
Pricing uses fixed terms in the near term, then shifts to variable pricing later ā a structure designed to let SanDisk capture upside if NAND prices rise.
Three contracts signed in the most recent quarter lock in a minimum of $42 billion in contractual revenue. Financial guarantees across five signed contracts total more than $11 billion.
Those guarantees include prepayments. SanDisk recognised $400 million of that on its balance sheet in the third fiscal quarter.
Barclays said this model fundamentally changes how memory companies can run their businesses ā reducing downside risk while keeping upside open.
S&P Global Ratings upgraded SanDisk’s credit to BB+ from BB, citing the repayment of all debt and a strong business outlook. The company now holds a net cash position, with $3.7 billion on the balance sheet.
Data center revenue grew 191% year-over-year, which has been a major driver of the financial turnaround.
Wall Street Piles In
Fourteen analysts have revised earnings estimates upward recently, according to InvestingPro data. The upgrades keep coming.
Citi’s Asiya Merchant raised her price target to $2,025 from $1,300 one day after Melius Research’s Ben Reitzes set a Street-high target of $2,350.
Reitzes made his call after President Trump’s visit to China earlier in May. He noted nothing particularly positive came from that trip, but still raised his target and maintained a constructive view on memory and AI chip names.
Cantor Fitzgerald set a $1,800 target. Bernstein went to $1,700. Jefferies is at $1,400.
The average price target across analysts sits at $1,516.88 ā actually implying around 4.5% downside from current levels.
Stock Performance
SNDK is up 564.9% year-to-date. Over the past 12 months, the stock has gained over 3,700%.
Tuesday’s volume came in at around 6.45 million shares traded, below the three-month average of 15.32 million ā a relatively quiet session given the size of the move.
InvestingPro’s Fair Value model flags the stock as currently overvalued at these levels.
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