SanDisk Corp. (NASDAQ:SNDK) shares climbed Monday after Bank of America dramatically raised its price objective on the NAND flash giant to $2,100 from $1,550 — a 35% jump from Friday’s close.
- SNDK stock is up. See the chart and price action here.
Analysts cited an increasingly iron-clad supply/demand imbalance and a new contract structure that analysts say reshapes the economics of the memory industry.
$2,100 Price Target
BofA reiterated its Buy rating on SNDK while lifting fiscal 2027 revenue and EPS estimates to $44 billion and $187.65, respectively, up sharply from prior forecasts of $37.7 billion and $153.59.
The revised price target is based on an unchanged ~10x multiple on C27E EPS of $199. At Friday’s close of $1,559.32, the new target implies roughly 34.7% upside, per Benzinga Pro.
The catalyst is what BofA calls SanDisk’s “new business models,” or NBMs — multi-year supply partnerships with customers that lock in fixed pricing upfront before converting to variable pricing over the remainder of the contract. The firm views these deals as structurally transformative.
“We see the NBMs as win-win as they lock in committed supply for customers, and committed financials for SanDisk,” analysts wrote in the note.
SanDisk has already signed over a third of its F27 revenue through NBMs, and the five agreements in place carry more than $11 billion in financial guarantees — including $400 million in prepayments and instruments held by third-party financial institutions.
The three contracts inked during the fiscal third quarter alone provide minimum contractual revenue of $42 billion. Crucially, the firm notes the contracts are structured so that “margins remain within guidance range, even if pricing is at the floor.”
Memory Supply Constraints
What’s keeping the pricing floor elevated? Supply constraints that BofA says won’t materially ease until 2028 or 2029 at the earliest.
With incremental NAND capacity years away, SanDisk holds significant pricing power across the more than 60% of its supply not yet locked into NBMs — all of which is available to customers “at higher prices vs. a year ago,” according to the note.
The firm expects ASPs to continue rising through calendar 2026, with pricing remaining robust in the first half of 2027.
BofA also highlighted a key structural shift in SanDisk’s risk profile.
“Given its better margin structure, if demand for NAND were to slow, SanDisk can afford to cut its production — whereas in the past, the company would have had to continue to produce wafers in order to generate cash.”
That flexibility, combined with the downside protections embedded in the NBMs, gives the bull case a floor it previously lacked.
The firm’s long-term thesis — Buy on “valuation, beneficial joint venture partnership, share gains, and long-term potential for industry consolidation” — remains intact.
With free cash flow expected to balloon to $27.5 billion in F27 and $34.3 billion in F28, SanDisk’s trajectory increasingly looks like a high-margin compounder wrapped in silicon.
SNDK Stock Price Activity: SanDisk shares were up 6.46% at $1660.00 at the time of publication on Monday, according to Benzinga Pro data.
SNDK is up roughly 564% year-to-date compared to the index’s 8.1% gain.
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