Key Takeaways
- SNDK shares tumbled 9.44% on Tuesday even as Bank of America issued a bullish price target increase
- Bank of America lifted its price objective from $2,100 to $2,500 while reaffirming its Buy recommendation
- BofA’s Wamsi Mohan projects average selling price increases reaching 35%, alongside 13% sequential bit growth
- The stock has soared 800% in 2025 and an astonishing 4,755% over the trailing year, pushing market cap to $323 billion
- Valuation concerns emerge with a forward P/E ratio of 33, surpassing Nvidia and Micron, while technical indicators flash warning signs
SanDisk shares experienced a significant decline on Tuesday, shedding 9.44% during the trading session. The pullback occurred despite Bank of America Securities increasing its price objective on the memory maker from $2,100 to $2,500.
Bank of America analyst Wamsi Mohan maintained his Buy recommendation on the shares. The upgraded outlook stems from a persistent supply-demand mismatch in the NAND flash market that Mohan anticipates will continue through 2027.
Mohan’s analysis suggests SanDisk’s pricing power will strengthen considerably, with average selling prices potentially jumping as high as 35%. Additionally, he forecasts bit shipments—representing total memory volume—will expand 13% from the prior quarter.
Building on these projections, Bank of America now anticipates June-quarter results of $9.1 billion in revenue paired with earnings per share of $37.01. Current Street estimates are more conservative, calling for $8.35 billion in sales and $34.26 per share.
For the subsequent quarter, BofA’s model points to revenue of $11.5 billion and EPS reaching $48.55.
Multi-Year Supply Agreements Enhance Earnings Predictability
Central to Mohan’s optimistic thesis is SanDisk’s strategic emphasis on securing long-term NAND supply agreements, referred to as NBMs. These multi-year arrangements provide revenue certainty and improve earnings forecasting capabilities for market participants.
Bank of America anticipates widespread adoption of these contractual frameworks among cloud providers and enterprise clients. The firm highlighted that these agreements are designed to preserve gross profit margins within SanDisk’s strategic parameters.
This strategic pivot has fueled SanDisk’s extraordinary market performance. Shares have rocketed 800% since January and an eye-popping 4,755% over the past year. The rally has transformed the Western Digital spinoff into a $323 billion behemoth.
The bullish sentiment extends across Wall Street. Mizuho recently increased its target from $1,825 to $2,200. Cantor Fitzgerald established a $2,900 objective. Susquehanna leads the pack with the highest target at $3,250.
The consensus rating stands at Strong Buy—comprising 14 Buy ratings, two Hold ratings, and zero Sell recommendations over the past ninety days. The mean price target of $1,979.38 suggests approximately 3% downside from current trading levels.
Growing Concerns Over Valuation and Market Dynamics
Despite widespread analyst enthusiasm, several risk factors warrant investor attention—as Tuesday’s sharp decline demonstrates.
SanDisk’s forward price-to-earnings multiple has expanded to 33 times, exceeding Nvidia at 22 times and Micron at 18 times. This valuation premium is increasingly drawing scrutiny from market observers.
Supply dynamics present another challenge. Elevated memory pricing could incentivize rivals including Micron, Kingston, and Kioxia to accelerate production capacity, potentially triggering a price correction cycle.
From a technical perspective, the weekly chart reveals a bearish divergence in the Relative Strength Index. The RSI has trended downward even as the stock price advanced—a configuration that frequently precedes corrections.
Currently trading at $2,238, the stock sits substantially above its 50-day moving average of $1,458, suggesting limited near-term support levels.
