I Think Sandisk Stock Will Be in the Low $2,000s in 2030. From About $1,790, That Wouldn't Beat the Market.

Shares of Sandisk (NASDAQ:SNDK) have risen about 650% in 2026 and trade close to $1,790 as I write this. A rally like that shifts the discussion to what the business could be worth years from now.

Management has put its own answer in writing. At its investor day in August, Sandisk set out a model spanning fiscal 2028 through fiscal 2030 -- and taken at face value, it depicts an exceptionally profitable company.

But the model lives in the memory business, where Sandisk's gross margin was about 16% as recently as fiscal 2024 (the 12 months ended June 2024).

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Management's model implies immense cash flow

Sandisk sells NAND flash memory, and the artificial intelligence data center expansion has transformed its results.

Datacenter revenue rose from $325 million in fiscal 2024 to $960 million in fiscal 2025 to $5.2 billion in fiscal 2026, growing faster every year. Total revenue hit $20.2 billion in fiscal 2026, up 175% year over year.

Growth is on track to continue, too. Sandisk guided for fiscal 2027 first-quarter revenue of $10.3 billion to $10.8 billion, along with non-GAAP (adjusted) earnings per share of $44 to $46.

Hold revenue unchanged at that midpoint for four quarters (no growth at all), and fiscal 2027 revenue totals about $42 billion.

The model starts from a base of that size. Management calls for revenue growth in the mid-to-high teens each year, adjusted gross margin close to 80%, and adjusted free cash flow at about 50% of revenue.

Increase a $42 billion base 15% annually for three years, and fiscal 2030 revenue comes to about $64 billion. At 18%, it's more like $69 billion. Use the model's cash flow target, and you end up with about $33 billion of adjusted free cash flow that year. Sandisk's total market value today, about $260 billion, is about eight times that number.

Can the margins withstand a downturn?

The model's weak spot isn't demand -- it's the premise that today's economics hold. Sandisk's gross margin was 16.1% in fiscal 2024, 30.1% in fiscal 2025, and 71.5% in fiscal 2026, and fiscal 2024's margin came with a $672 million net loss (fiscal 2025 posted a loss, too).

Even fiscal 2026's profits arrived late in the year. Gross margin reached 84.6% in the fiscal fourth quarter, up from 78.4% the prior quarter. Management reported higher prices generated about two-thirds of the fourth quarter's sequential revenue growth.

Put another way, the model asks pricing Sandisk has enjoyed for about two quarters to hold for four more years. I'm doubtful it will.

Granted, Sandisk has more protection than in previous cycles. Its long-term supply agreements (it calls them New Business Model agreements) span eight customers and come with committed volumes and minimum financial guarantees. The contracts cover about half of expected supply in fiscal 2027 and about two-thirds in fiscal 2028. But they haven't been through a declining market yet, and a guaranteed minimum isn't an 80% gross margin.

And if one of the model's years includes a typical memory correction, the cash flow could drop rapidly. Say fiscal 2030 free cash flow comes in at half the modeled amount -- about $16 billion. At 10 to 12 times that cash flow, Sandisk would be worth $160 billion to about $190 billion, or about $1,100 to $1,300 per share. That leaves the stock 25% to 40% below where it trades today.

A below-market return looks most likely

If the model holds, the payoff looks much better. Value about $33 billion of fiscal 2030 free cash flow at 12 to 15 times free cash flow, and Sandisk would be worth about $400 billion to $495 billion. That comes to roughly $2,700 to $3,400 per share at today's share count.

From here, the total return could amount to about 50% to 90% over around four years, or about 11% to 17% a year.

Notably, some of that cycle risk might already be priced in. The stock trades at about 24 times earnings but only about 10 times the adjusted earnings its fiscal Q1 guidance implies at an annualized rate.

Where does that leave the stock in 2030? My honest answer is a broad range: about $1,100 if the cycle bites, and about $3,400 if the model holds and the market pays up. I think the most likely result sits in the low $2,000s -- a below-market return from today's price.

In the end, Sandisk is arguably executing as well as any memory company in recent history, and its supply contracts may cushion the next downturn.

But at about $1,790, I simply believe the price already assumes the model largely works. Indeed, I think the model asks four years of peak economics from a business that has a high risk of cyclical contractions.

Daniel Sparks and his clients do not have positions 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.