Why Sandisk Stock Is Soaring Today

Sandisk (NASDAQ: SNDK) stock is surging in Friday's trading, with its stock up 7.1% as of 11:05 a.m. ET. Meanwhile, the S&P 500 was down 0.1%, and the Nasdaq Composite was down 0.3%.

Sandisk held an investor day conference yesterday, and the memory technologies specialist shared new long-term growth targets. Investors are bidding up the stock in response, and the company's share price is now up more than 580% year to date.

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Investors are responding positively to Sandisk's guidance

At its investor day conference, Sandisk laid out growth targets for its 2028 fiscal year through its 2030 fiscal year. For reference, the company is currently in fiscal 2027 -- and its fiscal years typically close either at the end of June or at the beginning of July.

For fiscal 2028 through fiscal 2030, Sandisk expects revenue to grow at a mid-to-high-teens percentage rate. Meanwhile, the company expects a non-GAAP (adjusted) gross margin of roughly 80%, adjusted operating margins approaching 75%, and an adjusted free cash flow (FCF) margin of approximately 50%. Additionally, the company said that it would be returning all of its excess cash after business investments to shareholders -- suggesting that the memory tech specialist will continue with its big stock buyback push. The company currently has authorization to buy back $15.5 billion worth of shares.

What's next for Sandisk?

Sandisk's recent guidance looks promising, with very strong gross margins, operating margins, and FCF margins, and solid annual sales growth. The company's updated outlook through fiscal 2030 has caused multiple high-profile investment firms to increase their price targets on the stock. For example, RBC Capital raised its one-year price target on the stock from $1,300 per share to $1,600 per share and reiterated a sector perform rating on the company's shares.

JP Morgan Chase also reinitiated coverage on the stock with an overweight rating and a one-year price target of $2,250 and said that Sandisk was uniquely positioned to benefit from NAND memory trends and growth for the artificial intelligence (AI) inference market. Sandisk has already posted stellar gains thanks to surging AI-related demand for memory chips, but the stock could still have significant upside if the company manages to hit the performance targets that it recently detailed.

JPMorgan Chase is an advertising partner of Motley Fool Money. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.