TLDR
- SanDisk shares climbed 7% following second-quarter results that topped forecasts, with EPS of $6.20 versus expected $3.49 and revenue of $3.03 billion beating $2.67 billion estimates
- Raymond James upgraded the stock to Buy with a $725 target, while Morgan Stanley raised its target to $690 and RBC Capital lifted its target to $650
- The company guided for Q3 revenue growth exceeding 52% sequentially, implying pricing increases of 60% or more quarter-over-quarter
- NAND supply tightness has reached extreme levels with SanDisk potentially sold out for the year as data center and AI demand accelerates
- Wall Street analysts maintain Strong Buy ratings with average price target of $597.19 as supply constraints expected to persist through 2026
SanDisk delivered a knockout punch in its second-quarter fiscal 2026 earnings report. The memory manufacturer posted earnings per share of $6.20, crushing analyst expectations of $3.49 by nearly 78%.
Revenue came in at $3.03 billion compared to the $2.67 billion Wall Street projected. The stock jumped about 7% following the announcement.
Year-to-date, shares have rocketed 143% higher. Over the past 12 months, the stock has gained a staggering 1,398%, currently trading at $539.30.
Analyst Upgrades Pour In
Raymond James analyst Melissa Fairbanks flipped her rating to Buy from Hold. She set a $725 price target and called the move “arguably one of the most delayed upgrades in history.”
Fairbanks sees more room to run despite the massive rally. She points to an “unprecedented” data center and AI cycle creating exceptionally strong demand.
Morgan Stanley‘s Joseph Moore hiked his price target to $690 from $483. The veteran analyst stated this represents “the strongest upcycle we have seen in our 30 years covering the memory industry.”
RBC Capital joined the party, raising its target to $650 from $400 while keeping a Sector Perform rating. Analyst Srini Pajjuri highlighted management’s strategy of “maximizing value through allocations.”
Supply Crunch Drives Pricing Power
SanDisk’s third-quarter guidance projects revenue growth topping 52% sequentially. Moore calculates that pricing must jump 60% or more quarter-over-quarter to hit those numbers.
Supply has tightened to levels where the company could be sold out for the entire year. Management is prioritizing supply toward data center builds over consumer and edge markets.
Limited new supply is expected online near term. This should keep pricing strong throughout 2026.
Despite bits declining slightly, pricing surged approximately 60% or more sequentially in March. The company is also negotiating longer-term agreements with customers.
Conservative Guidance Signals Upside
Moore noted something interesting about the margin expansion. Gross margins grew 15% quarter-over-quarter, far less than the 60% jump in average selling prices.
This suggests the company’s $13 earnings per share guidance for Q3 is conservative. That figure already sits at 2.5 times consensus estimates.
RBC models peak earnings around $92 per share for SanDisk. With the stock trading at roughly seven times that level, the firm sees balanced risk-reward. Memory stocks typically trade between five and ten times peak earnings.
Nine analysts have revised earnings expectations higher recently. Revenue growth stands at 23.6% with fiscal 2026 EPS forecasts at $14.12.
Wall Street holds a Strong Buy consensus on the stock based on 12 Buy ratings and four Hold ratings. The average price target of $597.19 implies 4% upside from current levels.
RBC expects NAND supply constraints to continue through 2026, supported by disciplined capital spending and controlled supply growth in both NAND and hard disk drive markets.
