Storage Giant Sandisk Rises Over 3% Pre-Market as Bernstein Raises Price Target to $3,000, Implying Nearly 50% Upside Potential

TradingKey - On June 30 EST, Bernstein analyst Mark Newman raised SanDisk ( SNDK) price target significantly from $1,700 to $3,000, while maintaining an "Outperform" rating. This comes after Citigroup ( C) raised its price target to $2,500 on June 25, marking another major Wall Street bank sharply upgrading its price expectations for the memory chipmaker. Boosted by the news, SanDisk shares jumped over 3% in pre-market trading.

[Source: Futu]

As of the close on June 29, SanDisk was trading at $2,050.39, with a year-to-date gain of 781%, making it the best-performing stock in the S&P 500 for 2026. Since spinning off from Western Digital and listing independently in February 2025, the stock has surged approximately 3,900%. Even after such an astronomical rally, Bernstein still sees nearly 50% upside.

The core argument for Newman's target price upgrade lies in the structural shift of SanDisk's newly signed long-term memory agreements (LTAs). According to Bernstein's research report, older LTAs generally favored customers, whereas the new agreements adopt fixed or band pricing with prepayment commitments to lock in customers and offer longer contract terms. SanDisk's recently signed LTAs have a floor price of approximately $0.29 per GB.

Newman pointed out that the market underestimates the protection provided by these financial commitments. As customers fulfill contracts and revenue is recognized, the remaining contract value gradually shrinks, meaning the same collateral amount covers a larger percentage of the remaining exposure, thereby strengthening protection over time. Even under a price collapse scenario more severe than that of 2010, he estimates SanDisk's FY2027 EPS could still reach $214 (assuming 60% of output is covered under LTAs), compared to just $81 without LTA protection. Newman raised SanDisk's base-case EPS estimate for FY2030 to $243 and for FY2028 to $272.

SanDisk's management has already validated this strategic pivot with action. The company disclosed during its Q3 earnings call that it has signed five multi-year supply agreements this year, with three contracts signed in that quarter alone carrying a minimum total value of $42 billion, and some extending through 2030. These performance obligations extend revenue visibility to 2028. SanDisk's CFO Luis Visoso stated that the longest contract spans five years.

This round of target price upgrades is not an isolated event. Citigroup raised its target price on SanDisk from $2,025 to $2,500 on June 25, predicting that average NAND prices will rise 186% year-on-year in 2026, with market supply shortages persisting through 2028. Morgan Stanley ( MS) also raised its target price on SanDisk from $1,100 to $1,750 on June 3.

The support from industry fundamentals cannot be ignored. TrendForce data shows that first-quarter NAND contract prices rose 33%-38% quarter-on-quarter (later revised upward to 55%-60% in June), and further expanded to 70%-75% in the second quarter. Memory industry consultants expect memory prices to rise 40%-50% quarter-on-quarter in the third quarter, and another 30%-40% in the fourth quarter. Citigroup analysts pointed out that demand in the NAND industry has outstripped supply, driven by sustainable AI-driven data center demand, with supply tightness expected to last beyond 2027.

However, the short-term market is not entirely optimistic. On June 29, Samsung Electronics, SK Hynix, and Micron Technology ( MU) were hit with a class-action lawsuit for allegedly manipulating memory prices and restricting global supply, causing SanDisk to plunge over 9% early in the session. On the same day, the South Korean government announced an expansion plan for Samsung and SK Group to build a total of four chip factories with a combined investment of approximately 800 trillion won. SanDisk closed down 1.93% on that day. Furthermore, the stock has fallen about 20% over the last five trading days.

Newman also anticipated this, acknowledging that LTAs will not completely eliminate the risks of future downcycles, but can significantly mitigate the downside. After a nearly 40-fold cumulative gain, the market is likely to be highly sensitive to any signs of growth deceleration. But for now, structural AI demand, contracted revenue backlogs, and the earnings growth trajectory continue to provide fundamental support for further upside in SanDisk.