Citi Research has substantially increased its price objective for SanDisk, citing a surge in enterprise demand for NAND flash memory tied to the rapid expansion of artificial intelligence infrastructure and spending on data-center capacity. The brokerage raised its target for SanDisk shares to $2,025 from $1,300 and kept a "Buy" rating on the stock.
Drivers behind the revision
The analysts, led by Asiya Merchant, attribute the upgrade to stronger-than-anticipated results from SanDisk’s Japanese memory partner Kioxia and a pricing backdrop that Citi expects to remain favorable into 2027. Citi’s team said demand for enterprise solid-state drives - eSSDs - is being propelled by hyperscale customers expanding generative AI training and inference workloads.
In its analysis, Citi forecasted a notable increase in NAND average selling prices, estimating they could climb by more than 186% year-over-year in 2026, with enterprise SSD pricing rising at an even faster pace. Those pricing dynamics are central to the brokerage’s upgraded valuation.
Kioxia’s performance and market tightness
Kioxia reported very strong quarterly revenue growth, with figures running at about 85% sequentially and 190% compared with the year-earlier quarter. The company signaled continued supply tightness across the NAND market and told Citi that demand is expected to exceed supply through 2027. Citi treated those results as confirmatory evidence for a sustained tight market and stronger pricing than previously modeled.
SanDisk’s structural protections
Citi highlighted SanDisk’s use of long-term supply agreements as a structural defense against the typical volatility of memory markets. Those agreements, which include pricing floors, predetermined volumes and financial guarantees, are expected by the analysts to help stabilize results and could support gross margins above 80% even in periods of softer pricing.
The brokerage also called attention to SanDisk’s recently announced $6 billion share repurchase authorization, noting that significant buybacks would be accretive to earnings per share over time according to their estimates.
Corporate positioning
SanDisk was spun out from Western Digital in February 2025. Since the separation, the company has increased its emphasis on enterprise and cloud storage markets while continuing to operate its consumer flash storage business. Citi argued that SanDisk’s partnership with Kioxia and its exposure to AI-related storage demand provide a competitive positioning advantage within the semiconductor memory market.
Analyst caveats
Despite the bullish revision, Citi flagged several risks that could undermine the optimistic scenario. These include the potential for an eventual oversupply in NAND markets, intensified competition from Chinese memory manufacturers, and the possibility of a slowdown in global data-center or AI-related spending - each of which could negatively affect pricing and demand.
Summary: Citi’s upward re-rating of SanDisk rests on sustained AI-driven demand, tight NAND supply as evidenced by Kioxia’s results, structural margin protections through long-term contracts, and shareholder returns via a $6 billion repurchase authorization; key risks remain on supply, competition and demand trajectories.