Bank of America raised its target price on SanDisk to $1,080 from $900 while reiterating a Buy rating, citing what it describes as an unexpectedly tight NAND supply backdrop and sharply higher pricing. The move was explained by BofA analyst Wamsi Mohan, who said “NAND supply remains tight,” and pointed to a rapid increase in prices.
In its note, the bank said NAND pricing is “up massively,” and directly addressed investor questions about whether the current strength can be sustained. BofA argued the cycle may prove more durable than past upsides because of structural shifts in demand rather than a purely transitory supply squeeze.
Two demand trends underpinned BofA’s view. First, the bank highlighted a “mix shift to data centers,” calling that market “a less cyclical end market.” Second, the firm emphasized what it described as “NAND demand from AI inferencing which we view as sustainable in the medium-term.” Together, BofA said these dynamics support stronger, more persistent pricing power for NAND suppliers.
The analyst note also documented SanDisk’s growing reliance on cloud and data center customers. BofA said revenue tied to that segment rose from 1% in early 2024 to around 15% by late 2026, and the bank expects further gains. That evolving revenue mix was a central input to the upgraded valuation.
Looking ahead to near-term results, BofA said it is “expecting a beat and raise quarter on pricing strength,” forecasting revenue and earnings that exceed both company guidance and Street expectations. To match that outlook, the bank raised its forecasts for average selling prices for NAND, reflecting ongoing pricing momentum.
On the supply side, SanDisk’s strategy includes pursuing long-term supply agreements intended to reduce volatility in procurement and output. BofA noted that such contracts could “help to maintain margins through-cycle.” Mohan concluded by pointing to a broader secular upside, calling it a “secular opportunity as AI inference makes NAND more indispensable,” which underpins the bank’s more bullish stance on the stock.
What this affects
- Semiconductor suppliers and memory markets, through tighter NAND pricing and margin implications.
- Data center and cloud customers, as rising NAND demand and prices could alter component sourcing and costs.
- AI-related hardware spending, given the bank’s assessment of sustained NAND demand from AI inferencing.