Overview
- Bank of America upgraded SanDisk’s price target from $2,100 to $2,500 and kept a Buy rating, with analyst Wamsi Mohan forecasting up to 35% sequential ASP growth and 13% bit growth.
- The market reaction was sharply negative with a roughly 9.4% drop the same day as the upgrade and a further roughly 13% plunge the following trading session driven by profit-taking and a rotation out of AI hardware.
- Bank of America’s bullish case emphasizes SanDisk’s shift to multi‑year NAND supply agreements called NBMs, which lock in revenue and are expected to stabilize margins compared with volatile spot pricing.
- Key near-term risks include a stretched forward P/E of about 32–33, technical divergence that signals potential mean reversion, and the threat that faster capacity from Chinese maker YMTC could push NAND prices lower.
- The episode highlights wider dynamics in memory markets where hyperscaler AI demand has tightened supply and raised margins but also increased volatility, so upcoming earnings and any signs of new Chinese supply will be pivotal for investors.