1 Analyst Says Ignore the Noise and Keep Buying Sandisk Stock

Citi lifted its price target on Sandisk (SNDK) to $875 from $750 while reaffirming a “Buy” rating. The SNDK stock upgrade suggests that Citi is bullish on strong storage demand for Sandisk amid the AI buildout. 

Valued at a market cap of $114 billion, SNDK stock is up a whopping 1,200% in the past year. Is it still a good buy?

The NAND Market Changes 

For years, NAND flash was treated like a commodity. Buyers wanted multiple suppliers, and prices swung wildly. The industry lurched from boom to bust and back again. That's changing fast. Data centers, powered by artificial intelligence workloads, are now the largest buyers of NAND, surpassing smartphones and PCs. 

Sandisk CEO David Goeckeler explains that data center demand forecasts were revised sharply upward over two consecutive forecast cycles, from mid-20% growth to mid-40%, and then to mid-to-high 60% growth for calendar year 2026.

AI companies aren't reselling storage in a different form factor. NAND is a small piece of a much larger, highly profitable architecture, which changes the pricing dynamic entirely.

"Their business model is not dependent on the volume of NAND they buy," Goeckeler noted at the conference. "Their consumption continues to go up."

Sandisk reported sequential data center revenue growth of 64% last quarter, driven by enterprise solid-state drive qualifications at major hyperscalers that are starting to convert into real revenue.

Supply-Demand Setup a Tailwind for SNDK Stock

Citi's bullish call rests on a simple argument: demand is outpacing supply, and that gap is not closing quickly.

NAND capital equipment spending has recently declined, even as market conditions have tightened. Sandisk has said it is investing to grow its bit output at a mid-to-high-teens rate annually.  

• New capacity takes years to build, which keeps the supply picture constrained for the foreseeable future.
• The storage giant recently committed over $1 billion to secure fab space through 2030 to 2035, a long-term bet on sustained demand.
• The management also pointed to a new potential tailwind: key-value cache technology for AI inference.
• Sandisk's early estimate puts incremental demand from that use case at 75 to 100 exabytes in 2027 alone, with further growth thereafter.

What's Next for SNDK Stock Investors?

Rather than auctioning supply every quarter, Sandisk is working toward multi-year agreements with data center customers. These deals, spanning one to five years, are structured to protect margins across cycles, with customers committing to growing exabyte volumes over time.

Sandisk has signed one such deal and says several more are in progress. If this approach gains traction, it could fundamentally reduce the cyclicality that has long kept a ceiling on NAND stock valuations.

Analysts tracking SNDK stock forecast revenue to increase from $7.36 billion in fiscal 2025 (ended in June) to $26.78 billion in fiscal 2027. In this period, EPS is forecast to expand from $2.99 to $87.40. If SNDK is priced at 10x forward earnings, it could rise over 12% from current levels.

Out of the 21 analysts covering SNDK stock, 14 recommend “Strong Buy,” one recommends “Moderate Buy,” and six recommend “Hold.” The average SNDK stock price target is $700.94, below the current price of about $734.