Evercore Sees More Upside in Surging Sandisk as AI Drives Storage Demand
Shares of SanDisk have skyrocketed roughly 2,740% over the past year, yet analysts at Evercore ISI believe the rally may still have room to run. The firm initiated coverage with an Outperform rating and a $1,200 price target, implying about 26% upside from recent levels, while outlining a bullish scenario that could push the stock as high as $2,600.
Evercore argues that SanDisk is becoming a structural beneficiary of artificial intelligence growth, as demand for data storage continues to surge. The firm’s target is based on its fiscal 2027 earnings outlook, which sits above current market expectations.
A key driver behind the bullish outlook is the evolving dynamics of the NAND memory market. According to analysts led by Amit Daryanani, the current upcycle differs from past ones because of stronger demand from AI-driven infrastructure and long-term supply agreements between cloud companies and memory suppliers. These strategic contracts often include upfront payments and pricing floors, improving demand visibility and reducing the risk of oversupply.
SanDisk’s manufacturing partnership with Kioxia is another advantage, giving the company access to large-scale production without bearing the full capital costs of a vertically integrated chipmaker. This structure supports stronger margins and cash flow compared with some competitors.
The analysts also highlighted a shift in SanDisk’s customer base toward higher-margin data center clients. Demand from hyperscale cloud providers is expected to lift the company’s enterprise exposure over the coming years, supported by next-generation products such as its advanced NAND chips.
Despite the massive rally, Evercore notes that SanDisk still trades below its historical valuation levels, suggesting the market has yet to fully price in its improved fundamentals. However, risks remain, including potential supply expansion from rivals like Samsung Electronics, SK Hynix, and Micron Technology, as well as the possibility of slowing AI infrastructure spending.
