JPMorgan Just Announced a Huge Price Target for This Tech Stock

Sandisk (NASDAQ: SNDK) has soared more than 600% so far this year. But it may go even higher. Late last week, Harlan Sur, JPMorgan Chase's tech stock analyst, reinstated coverage of the memory supplier with an overweight rating and a $2,250 price target.

With the stock currently trading around $1,786, that would represent a 26% increase in the share price. Sur's reasoning for the hefty price target had three components. Let's take a look at them.

First, he points out that Sandisk is one of the top manufacturers of NAND flash memory in a market where demand is significantly outpacing supply.

Image source: Getty Images.

NAND memory is a type of non-volatile flash storage that retains data even when the device is powered off. And AI data center demand is causing the NAND market to grow at an estimated 5.3% annual growth rate. Meanwhile, due to supply constraints, the price of NAND flash memory is expected to jump 61% in the second half of 2026.

The semiconductor market is no longer as cyclical as it once was

Second, the cyclical semiconductor market -- which has historically seen booms and busts, with high demand driving up prices, overproduction, and subsequent market crashes and price declines -- has fundamentally changed. Due again to the huge imbalance between memory demand and supply, Sandisk has been able to sign multiyear agreements with eight major customers, including built-in pricing terms. The contracts are worth some $42 billion for the company.

Finally, JPMorgan notes that Sandisk is not resting on its technological laurels. It continues to innovate with new memory products that deliver higher density and performance.

Sandisk's latest quarterly results suggest that Sur is right about the company's prospects. In its fiscal fourth quarter, ended July 3, Sandisk reported revenue of $8.97 billion, up 51% from the previous quarter. Net income of $6.9 billion rose 91%.

For fiscal 2026, revenue rose 175% to $20.25 billion, and net income climbed 797% to $11.4 billion. Management expects revenue of $10.3 billion this quarter, more than all of 2025. And the company's gross margin is expected to be between 83% and 85%.

JPMorgan is hardly the only firm bullish on Sandisk. Bank of America maintains a "buy" rating on the stock with a target of $2,500. The average price target on the stock is $2,107, and 20 of 24 analysts covering Sandisk rate it a buy or strong buy.

So-called hyperscalers -- the AI firms building out massive AI infrastructure -- are expected to spend $750 billion on data centers this year alone, with that figure set to climb over time. If that spending does in fact happen, and right now there's little to suggest it won't, flash memory products will remain in high demand.

That would suggest the lofty price targets for Sandisk are appropriate.

Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Matthew Benjamin 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.