SanDisk (NASDAQ: SNDK) shares continued their upward momentum on Friday, climbing roughly 6% in regular trading and extending the stock's weekly advance to about 34%. The rally marks the fifth consecutive session of gains, fueled by fresh bullish commentary from Wall Street analysts following the company's investor day on Thursday.
JPMorgan resumes coverage with a bullish stance
JPMorgan resumed coverage of SanDisk with an Overweight rating and a price target of $2,250, implying roughly 47% upside from Thursday's close. The bank had previously suspended coverage due to internal policy restrictions. Analyst Harlan Sur highlighted SanDisk's evolving business model, which he believes is better positioned to capture the structural shift in NAND demand driven by AI inference workloads.
Sur noted that the company is "in many respects uniquely positioned to capture the ongoing structural inflection in NAND demand." He pointed to the rapid expansion of AI inference—where trained models process data and generate responses—as a key catalyst for NAND flash memory consumption.
AI data centers and KV caching create new opportunities
Citi Research also reiterated its Buy rating with a $2,100 price target. Analyst Asiya Merchant emphasized that AI data centers are becoming SanDisk's primary growth engine. She also highlighted an emerging opportunity in key-value (KV) caching, a technique used by large language models to store context and avoid recalculating information. Traditionally, KV caches reside in expensive high-bandwidth memory or DRAM, but as AI workloads grow, data centers are shifting portions of this cache to NAND flash storage, which offers longer retention at significantly lower cost.
Merchant believes this transition could create another meaningful source of long-term demand for SanDisk's products.
Long-term contracts improve visibility
Analysts also pointed to SanDisk's shift from short-term sales to long-term customer agreements as a reason for growing confidence. This strategic change is expected to provide greater revenue visibility and reduce the cyclicality historically associated with the memory industry. The company's investor presentation emphasized building longer-duration relationships with customers as AI infrastructure spending accelerates.
Other firms also raised their outlooks. RBC Capital lifted its price target to $1,600 from $1,300, while Wedbush maintained its $2,000 target.
Market context and broader chip rally
The surge in SanDisk shares comes amid a broader rally in chip stocks, partly driven by cooling producer prices that have eased inflation concerns. As noted in our earlier coverage, cooling PPI lifts chip stocks, with SanDisk, Micron, and Marvell leading the charge. Additionally, SanDisk's recent AI-driven growth targets through 2030 have been a key catalyst, and the stock's 541% surge tests analysts' resolve as new contracts aim to tame NAND cycles.
SanDisk projects the NAND flash market will expand to $300 billion this year and approach $500 billion by 2027, up from an estimated $70 billion in 2025. The company forecasts mid-to-high-teen annual revenue growth between fiscal 2028 and 2030, with adjusted gross margins around 80% and adjusted operating margins of approximately 75%.
This article is for informational purposes only and does not constitute financial advice.
