Shares of SanDisk (SNDK) moved higher in Thursday afternoon trading after Citi reaffirmed its Buy rating and $2,100 price target on the memory and storage company, a level that implies roughly 20% upside from recent prices. The stock had been under pressure earlier in the session before turning up more than 2%.
The catalyst was Micron Technology's latest quarterly report, which Citi read as a positive signal for NAND flash fundamentals. Micron disclosed a 42% sequential increase in NAND revenue, with prices climbing about 30% — well above the roughly 20% consensus estimate and Citi's own 34% projection.
Supply discipline reinforces the thesis
Micron management also guided that its own NAND supply will expand more slowly than overall industry supply in calendar 2026, a signal that the market should stay tight. For 2027 and 2028, the company expects industry NAND bit shipments to grow in the mid-20% range while remaining supply constrained in both years.
Citi analyst Atif Malik pointed to structural demand from AI infrastructure as a key support. One driver is the growing use of solid-state drives to offload key-value cache from high-bandwidth memory and other constrained, costlier computing resources. Malik said the read-through reinforces SanDisk's case for strong business fundamentals and improved visibility, and that the firm remains constructive on favorable NAND supply-demand dynamics.
Citi acknowledged that Micron's expected NAND supply growth runs above SanDisk's mid-teens industry CAGR assumption, but kept a positive stance, citing durable demand and visibility from non-binding manufacturer agreements.
A stock that has already run hard
The supportive NAND backdrop has fueled a dramatic rally in SanDisk shares. The stock has gained more than 530% this year and over 1,300% in the past 12 months as investors gravitated toward AI-linked memory and storage names.
Micron, by contrast, slipped more than 0.15% on Thursday despite beating expectations and issuing an upbeat outlook. Morgan Stanley analyst Joseph Moore noted the earnings beat was about 5%, smaller than the 20% to 40% beats seen in several prior quarters. Gross-margin guidance of roughly 86.25% also came in slightly below elevated expectations, which Micron attributed to temporary costs including inventory absorption, higher fiscal 2027 bonus accruals and cleanroom startup expenses. Management described the period as the cyclical floor for gross margins in fiscal 2027 and expects profitability to improve as revenue grows.
Other analysts stayed constructive. Hargreaves Lansdown's Matt Britzman said the report is no longer an earnings surprise story, with earnings durability now driving shares. Raymond James analyst Melissa Fairbanks highlighted Micron's comment that it has no clear visibility into when NAND supply will catch up with demand — a shortage that could support further price increases and margin expansion, though it may also cap near-term volume growth.
Goldman Sachs raised its Micron price target to $1,250 from $1,100 while keeping a Neutral rating. Analyst James Schneider cited strong demand and a growing base of customer commitments. Micron now holds 26 long-term agreements covering about 35% of projected revenue through fiscal 2030, with roughly 75% of those carrying structured pricing.
For SanDisk, the combination of AI-driven storage demand, limited NAND supply and long-term customer commitments provides a supportive backdrop even after this year's extraordinary gains.
This article is for informational purposes only and does not constitute financial advice.
