Key Takeaways
- Melius Research launched coverage with a buy recommendation and $1,350 price objective
- Cantor Fitzgerald increased its price objective to $1,400; Morgan Stanley upgraded to $1,100
- NAND pricing could surge 70–90% sequentially in the first half of 2026
- Constrained NAND supply is projected to persist through the 2027–2028 period
- Morgan Stanley projects gross margins near 80% with earnings significantly exceeding consensus estimates
Sandisk shares hit a record high approaching $990 late last week and continued their upward trajectory. On Monday, the stock surged more than 7%, reaching $1,063, following multiple analyst upgrades and elevated price targets from major Wall Street firms.
Melius Research led the charge by launching coverage with a buy rating alongside a $1,350 price objective. This target represents approximately 36% potential upside from the stock’s position at the end of last week.
Both Cantor Fitzgerald and Morgan Stanley joined the bullish chorus. Cantor elevated its price target to $1,400, while Morgan Stanley increased its forecast to $1,100, with both firms highlighting surprisingly robust fundamentals in the memory semiconductor sector.
The underlying thesis from all three analysts converges on a single narrative: NAND flash memory prices are experiencing rapid appreciation, available supply remains constrained, and AI-driven data center demand shows no signs of weakening.
Market intelligence suggests NAND average selling prices could climb between 70–90% on a sequential basis during the early months of 2026. This level of pricing strength is uncommon in the semiconductor industry, and Wall Street believes it will substantially boost Sandisk’s profitability.
Morgan Stanley’s updated forecast anticipates gross margins nearing 80% and projects 2026 and 2027 revenue figures substantially higher than current Street consensus. The investment bank also anticipates Sandisk will exceed earnings expectations in its next quarterly report.
Melius positioned its optimistic outlook around a fundamental transformation in demand patterns. The research firm contends that high-bandwidth memory, which complements AI processors, remains in the nascent phases of an extended growth trajectory that could extend “through the end of the decade.”
Historically, the primary concern surrounding memory chip manufacturers has been cyclicality. Semiconductor demand typically experiences boom-and-bust patterns, and investors have historically been reluctant to assign premium valuations to Sandisk due to this volatility.
Supply Constraints Driving Market Tightness
While DRAM producers are expanding production capacity — including through the conversion of certain NAND manufacturing facilities — minimal new cleanroom infrastructure investment is being directed toward NAND production specifically. This supply-demand imbalance is anticipated to maintain market tightness at minimum through the 2027–2028 timeframe.
Hyperscale cloud operators, consumer electronics manufacturers, and enterprise buyers are all vying for access to the same limited NAND supply pool. The market is essentially sold out, which is reflected in current pricing dynamics.
A significant long-term trend analysts are monitoring involves the expansion of long-term supply agreements between memory producers and their customers. Comparable LTA frameworks have already transformed DRAM pricing mechanics for Micron and Samsung. Should NAND adopt similar structures, it could introduce greater pricing predictability and more consistent earnings patterns for Sandisk moving forward.
Attractive Valuation Multiple Remains
Sandisk operated at a loss for three consecutive years before returning to profitability during the current fiscal year. Wall Street consensus projects 2026 earnings around $41.75 per share, expanding to over $107 in 2027. Even looking out to 2030, analyst estimates show earnings remaining above $43 — exceeding the company’s likely current-year performance.
Trading below 25 times forward earnings, the stock appears reasonably valued relative to these profit projections. Morgan Stanley highlighted that Sandisk trades at a valuation discount compared to Micron when evaluated on a forward cash flow basis.
Market participants will closely monitor forthcoming earnings releases, potential LTA announcements, and capital deployment strategies including share repurchase programs as cash generation accelerates.
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