TLDR
- SanDisk (SNDK) stock plummeted 8.08% Friday without any obvious negative catalyst
- Citi’s Asiya Merchant boosted her price target to $875 from $750 while maintaining a Buy recommendation
- The revised target comes after Micron reported that NAND supply will remain below demand levels indefinitely
- Year-to-date, SNDK has climbed more than 201%, with gains exceeding 1,200% over the trailing twelve months
- Wall Street’s consensus price target of approximately $700 trails the current share price near $734
Shares of SanDisk experienced a significant selloff Friday, declining more than 8% despite receiving an upgraded price target from a prominent Wall Street analyst. The contradictory signals have investors debating whether this represents an attractive entry point or a red flag.
Asiya Merchant from Citi increased her SanDisk (SNDK) price objective to $875, up from her previous $750 estimate, while reaffirming her Buy recommendation. Her analysis followed Micron’s recent quarterly results, where the company projected persistent NAND supply shortages relative to demand. Merchant highlighted this imbalance as a fundamental catalyst supporting her optimistic stance on SNDK.
Despite Friday’s selloff, the memory stock has delivered exceptional returns. SNDK shares have climbed approximately 201% in 2025 alone and have skyrocketed more than 1,200% over the past year. The company’s market capitalization currently stands at roughly $114 billion.
The investment thesis for SanDisk revolves around explosive AI-related demand for storage solutions. Data centers have emerged as the primary consumers of NAND flash memory, displacing traditional leaders like smartphones and personal computers. CEO David Goeckeler disclosed that data center demand projections were repeatedly revised higher across two consecutive forecasting cycles — jumping from mid-20% expansion to mid-40%, before accelerating again to mid-to-high 60% growth anticipated for calendar 2026.
Goeckeler emphasized that artificial intelligence firms aren’t simply reselling storage capacity. Their consumption patterns continue expanding irrespective of NAND pricing fluctuations. “Their business model is not dependent on the volume of NAND they buy,” he noted during a recent industry conference.
Supply Constraints Meet Accelerating Demand
SanDisk delivered 64% quarter-over-quarter data center revenue expansion last quarter, propelled by enterprise SSD certifications at leading hyperscale cloud providers translating into actual sales.
From a supply perspective, NAND manufacturing equipment investment has contracted even as market dynamics tighten. Establishing new production capacity requires multiple years. SanDisk has committed more than $1 billion to secure fabrication facility capacity extending through 2030 to 2035 — signaling confidence in durable demand trends.
Leadership also identified an emerging growth opportunity: key-value cache solutions for AI inference workloads. Preliminary projections suggest this application could generate incremental demand ranging from 75 to 100 exabytes during 2027 exclusively.
Strategic Shift Toward Multi-Year Agreements
Instead of transacting on a quarterly basis, SanDisk is transitioning toward extended contracts with data center clients. These agreements spanning one to five years aim to stabilize profit margins throughout industry cycles while securing expanding exabyte commitments. Management has finalized one such arrangement and indicated additional agreements are under negotiation.
Wall Street analysts project SanDisk’s revenue expanding from $7.36 billion in fiscal 2025 to $26.78 billion by fiscal 2027. Earnings per share estimates show dramatic growth from $2.99 to $87.40 during this timeframe.
Among 21 analysts monitoring SNDK, 14 assign Strong Buy ratings, one recommends Moderate Buy, and six suggest Hold positions. The consensus price target stands at $700.94 — trailing the current trading level around $734. This disconnect between analyst expectations and market pricing adds complexity to interpreting Friday’s decline.
Citi’s $875 projection represents the most aggressive bullish forecast on Wall Street and substantially exceeds the analyst community’s average outlook.
