Key Takeaways
- SanDisk (SNDK) shares tumbled 8.08% Friday with no apparent trigger for the decline
- Citi’s Asiya Merchant increased her price target to $875 from $750 while maintaining a Buy recommendation
- The target increase comes after Micron indicated NAND supply will trail demand indefinitely
- SNDK has gained more than 201% year-to-date and approximately 1,200% over the trailing twelve months
- Consensus analyst target of roughly $700 trails the stock’s current level near $734
Shares of SanDisk experienced a steep decline Friday, losing more than 8% of their value, despite receiving an upgraded price target from a prominent Wall Street analyst. The contrasting signals have investors debating whether this represents an attractive entry point or a red flag.
Sandisk Corporation, SNDK
Asiya Merchant from Citi increased her SanDisk (SNDK) price objective to $875, up from her previous $750 target, while reaffirming her Buy recommendation. Her analysis followed Micron’s recent quarterly results, where the company projected NAND demand would outpace available supply indefinitely. Merchant identified this supply-demand imbalance as a fundamental reason for maintaining optimism about SNDK.
Despite the Friday selloff, the stock’s performance has been exceptional. SNDK has climbed approximately 201% since the start of the year and skyrocketed over 1,200% during the past twelve months. The company’s market capitalization currently stands at approximately $114 billion.
The optimistic outlook for SanDisk is rooted in AI-powered demand growth for data storage solutions. Data centers have emerged as the primary purchasers of NAND flash memory, eclipsing traditional markets like smartphones and personal computers. SanDisk’s CEO David Goeckeler noted that data center demand projections were substantially revised upward twice in succession — initially from mid-20% growth to mid-40%, then escalating to mid-to-high 60% growth expectations for calendar 2026.
Goeckeler clarified that AI enterprises aren’t merely reselling storage capacity. Their usage continues expanding independent of NAND pricing trends. “Their business model is not dependent on the volume of NAND they buy,” he stated during a recent industry conference.
Constrained Supply Meets Surging Demand
SanDisk posted 64% quarter-over-quarter revenue growth in its data center segment last quarter, propelled by enterprise SSD certifications at leading hyperscalers translating into actual sales.
Regarding supply dynamics, NAND capital equipment investment has decreased even as market conditions grow tighter. Bringing new production capacity online requires multiple years. SanDisk allocated over $1 billion to secure fabrication facility space extending through 2030 to 2035 — a strategic wager on persistent demand strength.
Executives also highlighted a prospective growth catalyst: key-value cache technology for AI inference workloads. Preliminary projections suggest this application could generate incremental demand of 75 to 100 exabytes in 2027 alone.
Strategic Multi-Year Agreements Taking Shape
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 safeguard profit margins throughout market cycles and secure expanding exabyte commitments. The company has finalized one such arrangement and reports additional deals are under negotiation.
Analysts following SNDK project revenue climbing from $7.36 billion in fiscal 2025 to $26.78 billion by fiscal 2027. Earnings per share are anticipated to surge from $2.99 to $87.40 during that timeframe.
Among 21 analysts monitoring SNDK, 14 assign it a Strong Buy rating, one recommends Moderate Buy, and six advise Hold. The mean price target stands at $700.94 — beneath the current trading level around $734. This divergence between the consensus estimate and actual price adds complexity to interpreting Friday’s pullback for potential buyers.
Citi’s $875 projection represents the most aggressive bullish target on Wall Street and substantially exceeds the analyst consensus.
The post SanDisk (SNDK) Stock Tumbles 8% as Citi Analyst Hikes Target to $875 appeared first on Blockonomi.
Source: https://blockonomi.com/sandisk-sndk-stock-tumbles-8-as-citi-analyst-hikes-target-to-875/
