Why Sandisk Stock Surged Today
Key Points
Sandisk's sales are soaring.
The tech stock's price could rise another 50% from here.
- 10 stocks we like better than Sandisk ›
Shares of Sandisk (NASDAQ: SNDK) popped on Monday, following positive analyst commentary.
By the close of trading, Sandisk's stock price was up more than 15%.
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Image source: Sandisk.
Sandisk is a prime beneficiary of the AI megatrend
The rapid buildout of artificial intelligence (AI) data centers is creating an urgent need for high-performance storage solutions. This powerful trend plays right into Sandisk's wheelhouse.
Sandisk's sales leaped 61% year over year to $3 billion in its most recent quarter. Hyperscalers and other large tech companies are rushing to lock in their storage requirements.
Unable to satisfy this nearly insatiable demand, Sandisk has been hiking prices. Its profit margins, in turn, are surging.
Sandisk's operating profits leaped a staggering 505% to $1.1 billion in the quarter ended Jan. 2.
This Wall Street analyst sees more gains ahead for Sandisk's shareholders
Due in part to these encouraging results, Bernstein analyst Mark Newman boosted his price target on Sandisk's stock from $580 to $1,000. Newman's new share price prediction implies potential gains of roughly 50% from today's prices.
Newman highlighted Sandisk's strengthening pricing power amid the AI-driven demand boom. He believes that the storage leader's ability to command higher prices for its products will enable it to generate per-share profits of $90.96 in fiscal 2027.
Notably, Newman's new earnings-per-share forecast is nearly 30% above consensus estimates.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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