This Artificial Intelligence (AI) Stock Is Up 4,800% in the Past Year. Wall Street Says This Will Happen Next.
sandisk (SNDK +3.40%) has reinvented itself since being spun off from Western Digital in early 2025. The firm, as soon as a sleepy shopper model centered on transportable storage, has reoriented round enterprise storage options for synthetic intelligence.
That evolution has made Sandisk certainly one of the hottest trades on Wall Street. The inventory added greater than 4,800% in the previous 12 months as buyers diversified past conventional AI {hardware} firms like Nvidia and Broadcompouring capital into the reminiscence chip trade.
Here’s what buyers ought to learn about this AI infrastructure inventory.
Image supply: Getty Images.
Wall Street’s median goal value implies 22% draw back in Sandisk inventory
Just a few Wall Street analysts assume Sandisk inventory is headed increased throughout the subsequent 12 months. Mehdi Hosseini at Susquehanna just lately raised his target price to $3,250 per share. That implies 49% upside from the present share value of $2,185. But most analysts assume the inventory is just too costly.
Among 28 analysts, Sandisk has a median goal value of $1,702 per share. That implies 22% draw back. And some analysts count on substantial losses. William Kerwin at Morningstar and Srini Pajjuri at RBC Capital have set their targets at $1,000 per share, which suggests 54% draw back from the present value.
Sandisk is benefiting from an unprecedented reminiscence chip provide scarcity
Sandisk designs and manufactures storage merchandise primarily based on NAND flash expertise, together with embedded storage for shopper electronics, transportable reminiscence playing cards, and solid-state drives (SSD) for enterprise information facilities. Sandisk realizes value financial savings and provide chain safety by way of its three way partnership with Japanese reminiscence chipmaker Kioxia, which helps it compete with bigger rivals like Samsung and SK Hynix.
NAND flash reminiscence is used as long-term storage for artificial intelligence coaching information and fashions, and demand for AI infrastructure has led to a extreme provide scarcity. In flip, NAND costs almost doubled in the first quarter and tripled in the final 12 months as hyperscalers clamored to make sure enough storage capability for AI information facilities. Skyrocketing costs have led to very sturdy monetary outcomes for Sandisk.
In the third quarter of fiscal 2026 (ended in April), gross sales rose 251% to $5.9 billion, an excessive acceleration from 61% progress in the earlier quarter, pushed by particularly sturdy outcomes in the information heart section. Sandisk additionally reported non-GAAP (adjusted) earnings of $23.41 per diluted share, up from a lack of $0.30 per diluted share in the similar interval final 12 months.
Bears argue historical past will repeat when reminiscence chip demand collapses
Bears argue Sandisk and its opponents are caught in yet one more boom-and-bust cycle, which has been a defining high quality of the reminiscence chip trade over time. For occasion, booming demand throughout the pandemic was adopted by a collapse in 2022. Manufacturers responded by scaling again manufacturing, however that left them unprepared for the generative AI period, which has led to a different growth.
Supporting that bearish viewpoint: Despite great gross sales progress in the most up-to-date quarter, Sandisk merely maintained its market share in NAND. Memory chips, not like logic chips (CPUs and GPUs), are principally interchangeable, which means Sandisk’s merchandise aren’t particularly distinctive. So, the firm will not be doing effectively as a result of it has a aggressive edge, however relatively as a result of a excessive tide has lifted all ships.
“We do not consider Sandisk holds an economic moat,” writes William Kerwin at Morningstar. “We view flash memory chips as commodities that don’t command any pricing power, instead being governed by market supply/demand dynamics that determine pricing.”
Today’s Change
(3.40%) $74.25
Current Price
$2259.00
Key Data Points
Market Cap
$324B
Day’s Range
$2252.80 – $2322.00
52wk Range
$40.10 – $2322.00
Volume
63K
Avg Vol
14.8M
Gross Margin
56.04%
Bulls argue the present reminiscence cycle is completely different, however Wall Street is not satisfied
Sandisk bulls argue the present reminiscence chip cycle could also be completely different. Hyperscalers are so keen to make sure provide visibility that they’re signing multiyear buy agreements with reminiscence chip producers. That represents a deviation from historic norms, the place buyer contracts had been measured in months relatively than years.
Indeed, Sandisk introduced 5 multiyear partnerships final quarter. “These partnerships support durable, structurally higher earnings and a significantly more predictable and less cyclical business for Sandisk,” CEO David Goeckeler informed analysts. “We believe this marks a fundamental evolution of our business centered on deeper customer alignment, enhanced visibility, and long-term value creation.”
Wall Street doubts the bull narrative. After all, it is often harmful to inform your self, “This time will be different.” Analysts count on the present reminiscence cycle to break down in 2029. So, the consensus estimate says Sandisk’s adjusted earnings will enhance at 25% yearly by way of fiscal 2029. That makes the present valuation of 70 instances earnings look costly. Shareholders ought to think about trimming their positions.
