SanDisk (SNDK) Stock Slides 8% — But Citi Says Buy Anyway

TLDR

• SanDisk (SNDK) stock fell 8.08% on Friday despite no clear catalyst
• Citi analyst Asiya Merchant raised her price target from $750 to $875, keeping a Buy rating
• The upgrade follows Micron’s earnings report, where Micron said NAND demand will exceed supply for the foreseeable future
• SNDK is still up over 201% year-to-date and roughly 1,200% over the past 12 months
• The average analyst price target of ~$700 sits below the current trading price of ~$734

SanDisk stock dropped sharply on Friday, falling over 8%, even as one of Wall Street’s top analysts raised her price target on the stock. The move left investors wondering whether the pullback is a buying opportunity — or a warning sign.

Sandisk Corporation, SNDK

Citi analyst Asiya Merchant lifted her price target on SanDisk (SNDK) to $875 from $750, keeping a Buy rating in place. Her note followed Micron’s latest earnings report, in which Micron said NAND demand will exceed supply for the foreseeable future. Merchant pointed to that supply-demand gap as a core reason to stay bullish on SNDK.

Despite Friday’s drop, the stock has had a remarkable run. SNDK is up roughly 201% year-to-date and has surged over 1,200% in the past 12 months. The company currently carries a market cap of around $114 billion.

The bullish case for SanDisk centers on the AI-driven demand surge for data storage. Data centers are now the largest buyers of NAND flash, overtaking smartphones and PCs. SanDisk CEO David Goeckeler said data center demand forecasts were revised sharply upward over two consecutive cycles — from mid-20% growth to mid-40%, and then to mid-to-high 60% growth for calendar year 2026.

Goeckeler explained that AI companies are not simply reselling storage. Their consumption keeps rising regardless of NAND pricing. “Their business model is not dependent on the volume of NAND they buy,” he said at a recent conference.

Supply Tightening, Demand Growing

SanDisk reported 64% sequential data center revenue growth last quarter, driven by enterprise SSD qualifications at major hyperscalers converting into real revenue.

On the supply side, NAND capital equipment spending has declined even as market conditions tighten. New capacity takes years to build. SanDisk committed over $1 billion to secure fab space through 2030 to 2035 — a long bet on sustained demand.

Management also flagged a potential new growth driver: key-value cache technology for AI inference. Early estimates put incremental demand from that use case at 75 to 100 exabytes in 2027 alone.

Long-Term Deals in the Works

Rather than selling supply quarter by quarter, SanDisk is moving toward multi-year contracts with data center customers. These one-to-five-year deals are designed to protect margins across cycles and lock in growing exabyte commitments. The company has signed one deal and says more are in progress.

Analysts tracking SNDK forecast revenue growing from $7.36 billion in fiscal 2025 to $26.78 billion in fiscal 2027. EPS is expected to expand from $2.99 to $87.40 over the same period.

Out of 21 analysts covering SNDK, 14 rate it Strong Buy, one rates it Moderate Buy, and six say Hold. The average price target is $700.94 — below the current trading price of around $734. That gap between the average target and current price is part of what makes Friday’s dip complicated for buyers.

Citi’s $875 target remains the most bullish on the Street and sits well above the consensus.

The post SanDisk (SNDK) Stock Slides 8% — But Citi Says Buy Anyway appeared first on CoinCentral.