SanDisk Shares Gain Momentum After BofA Raises Target on Strong NAND Demand and Long-Term Supply Deals
SanDisk Shares Gain Momentum After BofA Raises Target on Strong NAND Demand and Long-Term Supply Deals
SanDisk has received a major vote of confidence from Bank of America, which lifted its price target on the memory-storage company to $2,100 from $1,550, citing stronger earnings visibility, rising NAND prices, and expanding long-term supply agreements. The update follows growing investor attention around SanDisk’s new business models, which aim to make revenue more predictable in a historically cyclical memory market.
Bank of America Highlights Stronger Earnings Visibility
According to the Proactive report, BofA’s bullish view is tied closely to SanDisk’s ability to lock in future revenue through structured customer agreements. These deals combine fixed pricing for an early period with variable pricing later, while also including pricing protections designed to support margins.
The bank described the structure as beneficial for both sides: customers gain reliable supply, while SanDisk gains clearer financial commitments. This is especially important in the NAND flash market, where pricing can move sharply depending on supply, demand, and inventory cycles.
New Supply Agreements Could Reduce Market Volatility
SanDisk has already secured more than one-third of its fiscal 2027 revenue through these new business models. The company has signed five agreements with financial guarantees above $11 billion, while three contracts signed in the third fiscal quarter carry minimum contractual revenue of $42 billion.
The agreements also include about $400 million in prepayments and other financial instruments managed by third-party institutions. BofA noted that contract durations have been staggered, which may help SanDisk avoid several major agreements expiring at the same time.
NAND Demand Remains Supported by AI and Data Growth
Demand for NAND storage remains strong as artificial intelligence, cloud computing, enterprise servers, consumer devices, and high-capacity storage systems continue to expand. Reuters reported last month that SanDisk’s recent quarter was boosted by strong NAND demand linked to AI workloads, with revenue reaching $5.95 billion and adjusted earnings of $23.41 per share.
This demand backdrop has made memory suppliers more attractive to analysts. BofA expects average selling prices to keep rising through calendar 2026, with favorable conditions likely continuing into the first half of 2027. The bank also noted that meaningful new supply may not arrive until 2028 or 2029, supporting the possibility of further pricing strength.
BofA Raises Revenue and Earnings Forecasts
Bank of America also increased its fiscal 2027 estimates for SanDisk. The bank now expects revenue of $44 billion and earnings per share of $188, up from prior forecasts of $37.7 billion in revenue and $154 in earnings per share.
The upgraded numbers reflect stronger pricing expectations, better contracted revenue visibility, and confidence that SanDisk can protect profitability even if NAND prices later soften. Analysts are also paying attention to SanDisk’s joint venture structure, market share gains, valuation, and possible industry consolidation.
Why Investors Are Watching SanDisk Closely
SanDisk’s strategy appears focused on changing the way investors view memory-chip companies. Traditionally, the memory business has been known for boom-and-bust cycles. When demand is high and supply is tight, prices rise quickly. When too much supply enters the market, prices can fall just as fast.
By using long-term agreements with financial commitments, SanDisk is trying to smooth out that cycle. MarketWatch recently described the company’s shift as a major transformation, with analysts pointing to improved stability, stronger visibility, and reduced cyclicality.
Outlook
SanDisk’s upgraded BofA target reflects rising confidence in the company’s ability to benefit from strong NAND demand while building a more stable business model. The combination of AI-driven storage needs, limited new supply, long-term customer contracts, and stronger pricing could keep investor interest high.
However, the memory market remains sensitive to future supply changes, customer spending trends, and broader technology demand. While BofA’s upgrade is positive, investors will likely continue watching whether SanDisk can maintain pricing power and execute its long-term contract strategy successfully.
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