AI storage frenzy sends SanDisk target soaring 52%, Citi says
Investing.com -- Citi Research has sharply increased its target price for Sandisk Corp, citing surging demand for NAND flash memory fueled by the rapid expansion of artificial intelligence infrastructure and data center spending.
The brokerage raised its price target on Sandisk shares to $2,025 from $1,300, while maintaining a “Buy” rating. Analysts said the revised outlook reflects stronger-than-expected earnings from Japanese memory partner Kioxia Holdings and a favorable pricing environment expected to persist through 2027.
Citi analysts led by Asiya Merchant said demand for enterprise solid-state drives (eSSDs) is being driven by hyperscalers expanding generative AI training and inference capabilities. The report highlighted expectations that NAND average selling prices could rise more than 186% year-over-year in 2026, with enterprise SSD pricing climbing even faster.
Kioxia reported quarterly revenue growth of approximately 85% sequentially and 190% annually, while forecasting continued supply tightness across the NAND market. The company also said demand is expected to exceed supply through 2027.
Citi noted that Sandisk’s long-term supply agreements are designed to reduce volatility by locking in pricing floors, predetermined volumes, and financial guarantees. Analysts believe these agreements could support gross margins above 80% even during weaker pricing cycles.
The report also pointed to Sandisk’s recently announced $6 billion share repurchase authorization, which Citi estimates could further boost earnings per share over time.
Sandisk, which was spun out from Western Digital in February 2025, has been expanding its focus on enterprise and cloud storage markets while maintaining its consumer flash storage business. Citi said the company’s partnership with Kioxia and its positioning in AI-related storage demand provide a competitive advantage in the rapidly evolving semiconductor memory market.
Despite the bullish outlook, Citi warned that risks remain, including potential oversupply, aggressive competition from Chinese manufacturers, and a slowdown in global data center or AI spending.