SanDisk Corp. (NASDAQ:SNDK) stock gained about 5.5% Tuesday as memory and storage names staged a strong relief rally following an overdone selloff, while investors returned to the sector on expectations that AI-driven supply constraints could persist for years.
The rebound extended to rivals Micron Technology Inc. (NASDAQ:MU), SK Hynix Inc. (NASDAQ:SKHY) and Western Digital Corp. (NASDAQ:WDC), as traders moved back into memory names following recent declines.
Technology stocks gained about 1.4%, while the S&P 500 rose 0.4%. SanDisk outperformed the broader technology sector.
Tight Supply and AI Demand Support the Rebound
The memory complex remains focused on constrained supply as hyperscalers seek multiyear agreements to secure capacity for AI infrastructure.
Micron gained more than 3% Tuesday amid expectations that memory shortages could persist into 2028 and beyond. More than 75% of Micron’s 2027 output is already committed, according to previously cited industry commentary.
SanDisk is also benefiting from rising AI-related storage demand, higher pricing and stronger visibility into long-term customer commitments.
The stock gained almost 380% in 2026, compared with the PHLX Semiconductor Index’s gain of more than 50%.
Rosenblatt Sees Data Center Demand Driving Growth
Rosenblatt analyst Kevin Cassidy maintained a Buy rating and a $2,400 price forecast, based on 10 times his fiscal 2028 non-GAAP EPS estimate.
Cassidy highlighted SanDisk’s fiscal first-quarter revenue of $11.03 billion, up 378% year over year and 23% sequentially, above his $10.55 billion estimate and the $10.72 billion consensus.
Adjusted EPS reached $49.51, topping Cassidy’s $45.80 estimate and the $46.67 consensus.
Data center revenue surged 61% sequentially and 1,682% year over year to $4.80 billion, while non-GAAP gross margin reached 85.1%. Sandisk generated $5.7 billion in adjusted free cash flow.
Long-Term Contracts Improve Visibility
Cassidy said SanDisk’s New Business Model agreements are performing better than expected.
The company has signed agreements with eight customers covering about 50% of fiscal 2027 bit production and roughly two-thirds of fiscal 2028 production, representing $93.9 billion in minimum committed revenue.
Cassidy said demand from potential agreements exceeds available supply through the end of the decade, while 95% of existing agreements involve investment-grade customers.
He also expects AI inference, TLC and QLC enterprise SSD adoption and KV-cache tiering to expand NAND demand. SanDisk expects KV cache to represent roughly one-third of the AI data-center flash market by decade-end.
Cassidy Raises Estimates
Cassidy raised his fiscal second-quarter revenue estimate to $12.40 billion from $12.20 billion and adjusted EPS to $56.90 from $52.98.
For fiscal 2027, he increased revenue to $49.48 billion from $48.80 billion and EPS to $221.28 from $210.
For fiscal 2028, he maintained his $60 billion revenue forecast and raised EPS to $247.71 from $240.
Sandisk itself guided second-quarter revenue to $12.2 billion to $12.6 billion and adjusted EPS to $55 to $57.
Analysts Remain Mixed on Valuation
Recent analyst actions show differing views after the stock’s sharp run.
Fox Advisors downgraded Sandisk to Equal-Weight on Nov. 2, while Wells Fargo maintained Equal-Weight and lowered its forecast to $1,300 on Oct. 30.
Rosenblatt remained substantially more bullish, maintaining Buy and its $2,400 forecast.
The broader debate now centers on whether sustained AI storage demand and long-term supply commitments can offset valuation concerns and the risk of future capacity additions.
Top ETF Exposure
- Invesco S&P 500 Pure Growth ETF (NYSE:RPG): 6.94% Weight
- First Trust US Equity Opportunities ETF (NYSE:FPX): 5.85% Weight
- Tortoise AI Infrastructure ETF (NYSE:TCAI): 4.04% Weight
Significance: Because SNDK carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
Price Action
SNDK Stock Price Activity: SanDisk shares are trading higher by 5.46% at $1,133.79 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo: jejim from Shutterstock