TLDR
- Melius Research launched coverage on Sandisk with a buy rating and $1,350 price target
- Cantor Fitzgerald increased its target to $1,400; Morgan Stanley boosted its to $1,100
- NAND average selling prices may climb 70–90% sequentially in early 2026
- Supply limitations in NAND are projected to maintain tight market conditions through 2027–2028
- Morgan Stanley projects gross margins near 80% and earnings significantly above consensus estimates
Sandisk wrapped up last week near $990, marking an all-time high, and the upward trajectory continued into this week. Shares climbed more than 7% on Monday, reaching $1,063, following a series of analyst upgrades and elevated price targets.
Melius Research led the charge by launching coverage with a buy rating and a $1,350 price target. This represents approximately 36% potential upside from late last week’s trading levels.
Cantor Fitzgerald and Morgan Stanley followed with their own adjustments. Cantor elevated its target to $1,400, while Morgan Stanley pushed its to $1,100, with both firms highlighting robust fundamentals in the memory sector.
The central thesis across all three investment firms remains consistent: NAND memory pricing shows significant strength, supply remains constrained, and AI data center demand continues to expand.
Industry metrics suggest NAND average selling prices could jump between 70–90% sequentially in early 2026. This degree of pricing strength is unusual in the semiconductor space, and analysts believe it will substantially boost Sandisk’s earnings profile.
Morgan Stanley currently projects gross margins nearing 80% and anticipates 2026 and 2027 revenues far exceeding current Wall Street consensus figures. The firm also predicts Sandisk will post another earnings beat when it reports next.
Melius positioned the bullish outlook around a fundamental shift in demand patterns. The firm contends that high-bandwidth memory, which complements AI chips, remains in the early phases of an extended growth trajectory that could extend “through the end of the decade.”
The traditional worry with memory stocks centers on cyclicality. Semiconductor demand historically swings between boom and bust periods, and investors have been hesitant to assign premium multiples to Sandisk because of this pattern.
What’s Keeping Supply Tight
While DRAM manufacturers are expanding capacity — partly by repurposing some NAND facilities — very little new cleanroom investment is being directed specifically toward NAND production. This supply shortfall is anticipated to sustain tight market conditions at least through 2027–2028.
Hyperscale cloud providers, consumer electronics manufacturers, and enterprise customers are all vying for the same limited NAND supply pool. This creates a sold-out environment, and pricing power reflects these conditions.
One longer-term trend analysts are monitoring is the emergence of long-term agreements between memory suppliers and customers. Comparable LTA frameworks have already transformed DRAM pricing dynamics with Micron and Samsung. If NAND adopts similar structures, it could introduce greater pricing stability and more predictable earnings for Sandisk in the future.
Valuation Still Looks Cheap
Sandisk operated at a loss for three years before returning to profitability this year. Consensus projections place 2026 earnings around $41.75 per share, expanding to over $107 in 2027. Even in 2030, forecasts show earnings remaining above $43 — exceeding what the company may generate this year.
At below 25 times earnings, the stock appears attractively valued relative to those projections. Morgan Stanley observed Sandisk trades at a discount to Micron on a forward cash flow basis.
Investors will be monitoring upcoming earnings releases, any LTA announcements, and capital allocation strategies including share buybacks as cash generation accelerates.
