Sandisk Corp. (NASDAQ:SNDK) received a bullish call from JPMorgan on Friday after its 2026 Investor Day, with the firm pointing to AI-driven storage demand, long-term customer agreements and sharply higher margins as potential drivers of multiyear earnings growth.
JPMorgan analyst Harlan Sur moved Sandisk to an Overweight rating from Not Rated following the company’s 2026 Investor Day. He set a December 2027 price forecast of $2,250, implying about 47% upside from Sandisk’s Aug. 13 closing price of $1,528.11.
AI Could Supercharge NAND Demand
JPMorgan expects the NAND flash market to expand dramatically as AI inference creates new storage requirements.
The firm estimates the market will grow from about $70 billion in 2025 to more than $300 billion in 2026. Sandisk expects the market to approach $500 billion in 2027. Data centers are expected to account for about half of the market in 2026, up from roughly 30% in 2025.
AI inference is particularly storage-intensive. Larger models, longer context windows and agentic AI applications require data to be stored and retrieved quickly. JPMorgan highlighted persistent key-value cache as an emerging source of NAND demand.
Meanwhile, industry wafer capacity remains about 30% below its previous peak and utilization is near 100%. JPMorgan said those supply conditions could support NAND pricing and extend the current upcycle.
$94 Billion In Deals Could Reduce Boom-Bust Cycles
A central part of JPMorgan’s bullish thesis is Sandisk’s new business model, which uses long-term agreements with major customers. The analyst sees Sandisk’s long-term agreements as a potential break from flash memory’s historic boom-bust cycle, replacing short-term pricing visibility with more than four years of committed economics.
Sandisk has signed eight agreements representing about $94 billion in total contract value at floor pricing. The contracts have a weighted-average duration of more than four years and include $16.5 billion in financial guarantees. JPMorgan estimates gross margins could remain around 80% even at floor pricing.
The agreements are expected to cover more than half of Sandisk’s bits in fiscal 2027 and roughly two-thirds in fiscal 2028. JPMorgan said that could effectively shift much of Sandisk’s business away from volatile spot-priced flash toward long-dated, high-margin revenue.
JPMorgan Sees EPS Growth Above 25%
Sandisk’s long-term financial model calls for mid- to high-teens percentage revenue growth in fiscal 2028 through fiscal 2030. It also targets an adjusted gross margin of about 80%, an operating margin of roughly 75% and an adjusted free cash flow margin near 50%.
JPMorgan expects that revenue growth to translate into an EPS compound annual growth rate above 25%. The firm also expects Sandisk’s plan to return 100% of excess cash flow to shareholders to reduce its share count and further support per-share earnings growth.
Sur forecasts calendar 2027 EPS of $250. His $2,250 price forecast applies a nine-times multiple to that estimate, within the historical seven- to 10-times forward earnings range for memory stocks.
Next-Generation Flash Adds Another AI Catalyst
JPMorgan also highlighted Sandisk’s technology roadmap. Its BiCS10 chip is sampling ahead of schedule and packs 65% more bits per wafer than BiCS8. The firm expects Sandisk to achieve a 27% compound annual growth rate in per-wafer bit productivity across several BiCS generations.
Sandisk is also developing High Bandwidth Flash, or HBF, for AI inference workloads. The first HBF memory die has been taped out, with initial inference product samples targeted for 2027.
JPMorgan said the combination of stronger through-cycle profitability, sustained AI-driven bit demand and share reductions could create a multiyear compounding earnings story for Sandisk.
Price Action
SNDK Price Action: Sandisk shares were up 7.41% at $1641.31 at the time of publication on Friday, according to Benzinga Pro data.
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