TLDR
- Melius Research launched coverage with a buy recommendation and $1,350 price objective
- Morgan Stanley increased its forecast to $1,100 while Cantor Fitzgerald moved to $1,400
- NAND pricing projected to climb 70–90% sequentially in Q1 2026
- Tight NAND supply conditions anticipated to persist into 2027–2028
- Morgan Stanley projects gross margins nearing 80% with earnings significantly above Street estimates
Shares of Sandisk ended the previous week near record highs around $990 and continued their upward trajectory into Monday’s session. The memory maker’s stock climbed more than 7%, reaching $1,063, following a flurry of positive analyst actions that sent bullish signals across Wall Street.
Melius Research led the charge by launching coverage with a buy recommendation and setting a $1,350 price objective. Based on late last week’s trading levels, that target suggests approximately 36% potential appreciation.
Both Cantor Fitzgerald and Morgan Stanley updated their outlooks as well. Cantor pushed its target higher to $1,400, while Morgan Stanley elevated its forecast to $1,100, with both firms pointing to memory market fundamentals exceeding previous expectations.
The common thread connecting all three analyst reports centers on accelerating NAND pricing, constrained supply conditions, and sustained demand driven by artificial intelligence data center expansion.
Industry tracking suggests NAND average selling prices could spike between 70–90% on a sequential basis during the first quarter of 2026. Such dramatic pricing momentum is uncommon in the semiconductor sector, and Wall Street believes it’s setting up Sandisk for substantial earnings growth.
Morgan Stanley’s updated model now anticipates gross margins climbing toward 80% while projecting revenue figures for both 2026 and 2027 that exceed the current Street consensus. The firm also predicts Sandisk will surpass expectations when it reports quarterly results.
Melius positioned its bullish thesis around a fundamental demand transformation. The research house contends that high-bandwidth memory products, which complement AI processing chips, remain in the nascent phase of an extended expansion cycle potentially lasting “through the end of the decade.”
The traditional worry surrounding memory stocks involves cyclicality. Semiconductor demand historically experiences volatile swings, which has made investors reluctant to assign premium valuation multiples to Sandisk.
What’s Keeping Supply Tight
While DRAM producers are expanding capacity — partly through converting certain NAND production lines — meaningful new cleanroom capital expenditure dedicated to NAND remains minimal. This supply-demand imbalance should maintain market tightness at least into 2027–2028.
Hyperscale cloud operators, consumer electronics manufacturers, and enterprise buyers are all vying for the same limited NAND inventory. The result is essentially a sold-out market with pricing power firmly in suppliers’ hands.
A significant development analysts are monitoring involves the emergence of long-term supply agreements between memory vendors and their customers. Similar contractual frameworks have already transformed DRAM pricing dynamics for Micron and Samsung. Should NAND follow this pattern, it could introduce greater pricing predictability and more consistent profitability for Sandisk moving ahead.
Valuation Still Looks Cheap
Sandisk endured three consecutive years of losses before returning to profitability in the current year. Street consensus projects 2026 earnings around $41.75 per share, expanding to over $107 in 2027. Even looking out to 2030, forecasts show earnings maintaining levels above $43 — surpassing this year’s expected results.
Trading below 25 times forward earnings, the valuation appears modest compared to where analyst projections stand. Morgan Stanley highlighted that Sandisk trades at a valuation discount to Micron when measured on forward cash flow metrics.
Market participants will focus on forthcoming quarterly earnings, potential long-term agreement announcements, and capital deployment strategies including share repurchases as cash generation intensifies.
