AI winner Sandisk gets a new Street-high target at Bank of America

Investing.com -- Bank of America has turned more bullish on Sandisk after hosting an investor meeting with chief executive David Goeckeler and chief financial officer Luis Visoso, with analyst Wamsi Mohan lifting the bank’s price target to $300, a new Street high.

BofA reiterated its Buy rating, writing that it “walked away more bullish on the stock” following discussions in San Jose.

According to BofA, management expects the NAND market to remain “undersupplied through at least end of C26”, a backdrop the bank said should support pricing as demand strengthens.

The analyst highlighted six key drivers underpinning Sandisk’s outlook, including “strong demand growth driven by datacenter and AI,” low industry inventories, the company’s ramping eSSD production, and potential share gains as Sandisk transitions further toward its BiCS8 technology.

BofA also cited Sandisk’s “increasing visibility from customers.”

Despite tight supply, the company has “no plans to ramp capacity,” according to BofA, with customers now “eager to lock in volumes.”

The firm added that SNDK management has started negotiating longer-term contracts that balance volume commitments with pricing, something BofA links to Goeckeler’s experience improving pricing discipline at Western Digital.

Furthermore, Sandisk is said to be watching closely for any signs of over-ordering.

Management described the current environment as “tepid” despite mid-teens demand growth and said first-quarter conditions are likely to remain seasonally weak.

Still, Sandisk aims to maintain a net cash position, with Visoso preferring to keep roughly “$1.3bn of cash on hand” for daily operations. BofA expects capital returns to “focus on buybacks.”

BofA raised its target multiple to 2.7x 2027 estimated price-to-book, arguing Sandisk deserves parity with peers as its eSSD ramp and BiCS8 transition “are already driving profitability higher.”

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