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Sandisk Solid State Drive Photo by Top Popular Vector on Shutterstock
The growth trajectory of the AI hardware space extends far beyond graphics cards, and memory suppliers are quickly becoming Wall Street’s preferred vehicle for building their next build. This was made clear again earlier this week when Barclays upgraded SanDisk (SNDK) to “overweight” and raised its price target to $2,300, noting that the company’s business model has the potential to disrupt the world of memory manufacturing.
Barclays analyst Tom O’Malley said in a note on the stock that memory and storage are “the most attractive areas below accelerators.” According to the analyst, the memory industry will continue to see price increases due to the supply-demand imbalance that could last until the end of 2027. In response, SNDK stock rose during the day’s pre-market trading as investors began to focus on both the company’s price trends and its uniquely built business model.
About SanDisk stock
Sandisk Corporation develops flash storage and memory technologies used in hyperscale data centers, AI infrastructure, enterprise systems, and consumer products. Headquartered in Milpitas, California, SNDK boasts a $243 billion market cap as investors rapidly pivot their portfolios to non-semiconductor AI infrastructure beneficiaries.
SNDK has been a star performer in the market since its breakout began. SNDK stock last traded at approximately $1,590, an increase of 4,293% from its 52-week low of $36.21. The stock has risen nearly 10% over the past five trading days as AI hype continues to push the AI and infrastructure-related memory stocks to new heights.
While traditional valuations appear to be quite bullish, the market appears to justify the premium attached to SNDK due to rapid revenue growth and the outlook for demand related to AI infrastructure. SNDK stock trades at approximately 23.3 times expected earnings and approximately 32 times sales. Although these multiples are high compared to the storage space, investors currently view SNDK as a provider of AI infrastructure platforms.
But the bigger story may be a new approach to customers through the company’s business model. Barclays highlighted that SanDisk has emerged as the “most aggressive and structurally innovative” company in the sector through the new business model agreement. The company guarantees supply to its customers while providing visibility into its own demand.
SanDisk reports strong performance and announces major contract
On April 30, SanDisk announced exceptional earnings for the third quarter of fiscal 2026. Revenue surged 97% from the previous quarter to total $5.95 billion, significantly beating consensus. GAAP earnings were $23.03 per share, while non-GAAP earnings increased to $23.41 per share.
SanDisk’s data center division turned out to be the biggest contributor. The segment’s quarterly revenue rose 233%, driven by strong demand for AI-related capabilities. The company highlighted that the results were driven by strong pricing and a mix shift in favor of high-end customers, as it prioritized the deployment of AI infrastructure.
The instruction was also more thorough than I expected. The company expects revenue for the fourth quarter of fiscal 2026 to be between $7.75 billion and $8.25 billion. Additionally, SanDisk expects quarterly EPS to increase between $30 and $33 per share.
But the biggest news came not from quarterly results, but from the company’s contracts. SanDisk reportedly signed five deals worth a minimum of $42 billion in total revenue. Additionally, these contracts run through 2031 and include quarterly purchase commitments that increase over time.
The deal also included more than $11 billion in financial guarantees, including upfront payments and third-party-backed financial products. Barclays claims these contracts are some of the most advantageous contract structures in the entire AI ecosystem due to reduced risk and increased visibility.
Management said this quarter was a “fundamental turning point” for the company as the new structure positions SNDK to generate structurally higher and more resilient earnings supported by multi-year AI infrastructure demand.
Analyst evaluation and target price of SANDK stock
Sentiment remains very strong on SNDK as AI infrastructure demand expands into memory/storage and there is a consensus ‘Strong Buy’ rating. A recent factor pushing up the stock price is that Barclays raised its price target on the stock to $2,300 and upgraded it to “overweight.” Analysts maintain SNDK’s average price target at just under $1,634. Meanwhile, the street price target is $2,590. Even after a large operation, Wall Street still sees SANDK as one of the opportunities to take full advantage of the demand for AI data centers and memory.
On the date of publication, Yanis Tsurpanos did not have (directly or indirectly) any positions in any securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see the Barchart Disclosure Policy here.
