SanDisk (SNDK) rises 10.3% after Apple validation secures AI-focused memory pricing power

• SanDisk has been at the center of an AI-driven memory boom in recent days, with tight NAND supplies, multi-year hyperscaler deals, and new technologies like SPRandom and BiCS8 supporting strong demand and pricing power for its data center and enterprise SSD products.
• An interesting development is Apple’s admission that memory cost increases are “inevitable,” effectively suggesting that suppliers like SanDisk now have meaningful pricing influence across the tech hardware ecosystem.
• Here we examine how Apple’s recognition of rising memory costs and SanDisk’s AI-focused, multi-year supply agreement could reshape the company’s investment story.

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SanDisk investment story summary

To own SanDisk today, you need to believe that the AI-driven NAND shortage and multi-year hyperscaler trade can support solid demand and pricing for enterprise SSDs, even though the stock is already tough and short-term volatility is rising. Apple’s confirmation that memory cost increases are “inevitable” strengthens an important short-term driver of pricing power, but does not eliminate the biggest risk: that future supply responses could erode margins once the current supply shortage eases.

In that context, Apple’s comments on rising memory costs are important because they publicly validate what the SanDisk contract and performance have shown throughout the year. With a minimum contract revenue of at least US$42 billion and about a third of fiscal year 2027 production already spoken for, SanDisk’s multi-year supply deal is now even more central to the story, locking in demand while the market debates how long this AI-driven squeeze will last.

But investors also need to understand how quickly today’s tight supply and high margins could disappear if NAND capacity grows faster than demand…

Read the full story at SanDisk (it’s free!)

The SanDisk story projects revenue of $13.3 billion and revenue of $3.1 billion by 2028. This would require a 19.6% increase in annual revenue and an increase in revenue of $4.8 billion from the current -$1.7 billion.

Find out why SanDisk’s projections yield a fair value of $264.95, 88% of the current price.

explore other perspectives

The most optimistic analysts were already predicting revenue of nearly US$17.7 billion and profits of about US$5.7 billion by 2028, so if you support a world of sustained AI storage tightness and multi-year pricing strength, your expectations are closer to that bullish camp, but it’s much more aggressive than the consensus and could be challenged or strengthened as the Apple and AI memory story evolves.

Check out 5 other fair value estimates for Sandisk – Find out why the stock is worth less than half its current price.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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