After rocketing more than 2,800% over the past year, memory giant Sandisk (SNDK) has plunged roughly 49% from its 52-week high — nearly cutting its share price in half. But in a rare show of conviction, Wall Street analysts are overwhelmingly sticking to one view: the stock is still a buy.
Beneath that consensus, however, lies a dramatic disagreement over where the stock is actually headed. Price targets range from as low as $1,300 to as high as $3,000, more than double the bearish estimate, with the average sitting around $2,220. The wide dispersion reflects one central debate — just how long will the AI-fueled NAND memory shortage last?
The bulls argue the shortage will keep profits elevated for years. The bears warn it is simply a commodity cycle that will eventually turn. Both sides can point to compelling evidence.
On the bullish side, the numbers are staggering. In the fiscal fourth quarter ended July 3, Sandisk’s gross margin soared to nearly 85% from just 26.4% a year earlier, while non-GAAP earnings per share rocketed to $39.25 from $0.29. J.P. Morgan analyst Harlan Sur said the results “suggest a viable path toward stronger earnings power, dampened cyclicality, and more durable fundamentals.”
Yet Morningstar Chief Market Strategist David Sekera struck a cautious tone: “I still think it’s more of a commodity-oriented product. At some point, supply is going to catch up, and when that happens, look out below.”
Despite this tug-of-war over price targets, the buy ratings are virtually unanimous. Thirteen of 16 analysts covering the stock rate it a buy. Their conviction is anchored in an unprecedented wave of capital spending on artificial intelligence data centers. Big tech companies are hoarding memory chips, with AI-related capex expected to reach at least $750 billion this year alone. Alphabet recently raised its 2026 capex target to as much as $205 billion and signaled the figure could climb further in 2027. Micron Technology’s management expects tight supply conditions to “persist beyond calendar 2027,” while SK Hynix has predicted the memory shortage will stretch through 2030. These industry signals form the foundation of the buy case.
The immediate trigger for Sandisk’s sell-off was a revenue guidance miss. The company’s first-quarter revenue midpoint of $10.5 billion came in below the consensus estimate of roughly $10.8 billion, prompting several analysts to trim their price targets. The stock has been sliding for more than a month.
The deep pullback, however, has dramatically compressed Sandisk’s valuation. The trailing price-to-earnings ratio has fallen to around 17, well below the S&P 500’s multiple of approximately 26 and the tech sector’s 34 — and a steep discount to the 42 times earnings the stock once commanded. While the market appears to be pricing in long-term uncertainty, profit-taking and overreaction may also be at play. Even after the sharp decline, Sandisk remains up more than 400% year to date.
This is not a risk-free bet. If tech spending loses momentum or chip supply floods back, current margins and growth rates would come under pressure. But with AI demand showing no signs of peaking and industry leaders warning of a prolonged shortage, the heavily corrected price may already offer a measure of safety for investors who can stomach the volatility.
