SanDisk Corp. (NASDAQ:SNDK) just delivered 175% annual revenue growth, an 84.6% gross margin and nearly $9 billion of quarterly sales, up nearly fivefold from a year ago.
And Wall Street sold it.
The company’s stock price fell sharply Thursday after its fiscal first-quarter outlook landed roughly 2.5% below Wall Street expectations. But Bank of America analyst Wamsi Mohan thinks investors may be applying the old NAND playbook to a business that is changing underneath them.
Mohan reiterated a Buy rating and $2,500 price objective, calling SanDisk a “secular opportunity as AI inference makes NAND more indispensable.”
That phrase is doing a lot of work.
Why BofA Sees A ‘Secular Opportunity’ In SanDisk Stock
For decades, NAND flash behaved like a commodity.
Manufacturers expanded capacity when prices were high. Supply eventually caught demand. Prices collapsed, margins disappeared and another cycle began.
AI inference could break that pattern.
Training creates the model. Inference is what happens every time users or software actually run it.
As AI moves from occasional chatbot queries toward always-on agents and enterprise applications, enormous amounts of data must be stored and retrieved quickly.
That makes storage part of the AI infrastructure itself.
“The era of inference. AI is fundamentally a memory-centric, storage-intensive problem,” SanDisk CEO David Goeckeler said during the earnings call.
SanDisk Changes How Storage Gets Sold
The Milpitas, California-based company has signed new business model agreements, or NBMs, with eight data center and edge customers.
Those signed contracts represent at least $93.9 billion of revenue at floor pricing and $91.1 billion of remaining performance obligations.
They are backed by $16.5 billion of customer cash deposits and financial guarantees. Their weighted-average duration exceeds four years.
That is the part of the SanDisk story that looks least like the NAND industry investors remember.
Data Centers Are Already Replacing The Consumer
The revenue mix shows why customers are willing to make those commitments. SanDisk’s data center revenue doubled sequentially to $2.98 billion last quarter.
Data centers represented 38% of bits exiting fiscal 2026, compared with roughly 12% one year earlier.
Edge revenue jumped 48% sequentially to $5.43 billion.
Consumer revenue moved in the opposite direction, falling 32% to $556 million.
That divergence may be more important than the headline revenue beat.
SanDisk is becoming less dependent on PCs and smartphones just as AI infrastructure becomes its fastest-growing end market.
Management also sees customer demand exceeding supply beyond calendar 2027, according to BofA.
Fiscal 2027 sellable-bit growth should reach only the mid-teens because SanDisk plans to carry additional inventory to support its contractual commitments.
The constraint, therefore, may increasingly be supply rather than finding buyers.
There Is One Uncomfortable Number
Fiscal fourth-quarter revenue reached $8.97 billion, up 51% sequentially. Yet roughly two-thirds of that growth came from pricing. That’s exactly what memory investors fear because prices eventually fall.
BofA itself lists oversupply and a sharp NAND pricing decline among SanDisk’s biggest risks.
The question is whether long-term contracts make the next downturn less destructive.
The firm forecasts fiscal 2027 EPS of $233.85, up 229%, and $27.4 billion of free cash flow. At the $1,350.50 price used in Mohan’s report, SanDisk traded at just 5.8 times those earnings.
His $2,500 target applies 10 times calendar 2027 EPS of $255, roughly in line with global memory peers.
He isn’t asking for a re-rating. He’s asking the market to stop pricing a collapse.
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