This is why Citi Analysts Believe Sandisk Could Rally Another 50%

Shares of Sandisk (NASDAQ: SNDK) have already surged more than 3,000%, but some analysts believe the stock still has significant room to climb. In fact, analysts at Citi believe the stock could rally another 50% to as high as $2,025 per share. All thanks to the rising demand for NAND (NOT AND) memory, favorable pricing conditions, and continued growth in artificial intelligence infrastructure.

After all, NAND flash memory is a critical component used in data centers, cloud computing systems, smartphones, and AI applications. As artificial intelligence expands rapidly, demand for high-performance storage solutions is increasing at an equally fast pace. 

And Sandisk, a pure-play NAND stock, is positioned to benefit from it all. According to Citi analyst Asiya Merchant, the supply-and-demand environment for NAND remains highly favorable and could stay strong through the end of the decade.

Sandisk’s long-term customer agreements are also expected to support exceptionally high profit margins, potentially exceeding 80% in future years. These contracts provide the company with stronger revenue visibility while helping shield it from short-term market fluctuations.

“Raising SNDK [target price] to $2,025 (9-10x CY27E PE) from $1,300 (7-8x prior) following strong Kioxia earnings, reinforcing our view of persistently strong storage demand and a highly favorable pricing environment, fueled by intensifying AI interest,” analyst Asiya Merchant wrote in a note to clients, as quoted by Seeking Alpha.

NAND Supply Cannot Keep up with Demand

A major catalyst for the explosive NAND demand is artificial intelligence data centers. AI systems require enormous amounts of data processing and storage capacity, which directly increases the need for NAND memory. Every new AI server, cloud platform, and large-scale data center expansion creates additional demand for advanced storage products.

At the same time, NAND supply growth has not been able to keep pace with this surge in demand. Manufacturing capacity was not originally designed to support the massive expansion now taking place in AI computing. Building new semiconductor fabrication facilities takes years and requires billions of dollars in investment. As a result, supply remains relatively constrained while demand continues to accelerate.

The rapid growth of data centers further supports the long-term outlook. 

There are currently around 4,000 operational data centers in the United States, with another 1,500 to 3,000 either planned or under construction. Research also shows strong regional expansion across the country, particularly in the South and Midwest. Globally, there are now more than 10,000 data centers, and nearly all require large amounts of NAND storage to operate efficiently. As AI adoption spreads worldwide, the need for advanced memory solutions is expected to grow substantially.

Sandisk Earnings Have Been Strong

The company recently reported earnings per share of $23.41, beating analyst expectations by $8.75. Revenue reached $5.95 billion, which was year-over-year growth of more than 252%. That also beat estimates by $1.22 billion. 

CEO David Goeckeler highlighted the company’s financial strength in the latest earnings release, pointing to its zero-debt balance sheet, strong cash generation, and recently authorized share repurchase program. 

Looking ahead, SanDisk expects fourth-quarter revenue to range between $7.75 billion and $8.25 billion, with diluted net income projected between $30 billion and $33 billion. Management also believes results could improve further as AI-driven demand for NAND storage continues to rise.

Overall, the company appears well-positioned for continued growth. Strong earnings, expanding margins, aggressive analyst price targets, and ongoing AI infrastructure investment all support the bullish case for the stock. While shares have already delivered enormous gains, many investors and analysts believe the long-term opportunity in AI and data center expansion could still drive meaningful upside for SanDisk in the years ahead.

Investors should also recognize that NAND memory remains one of the foundational technologies behind the broader AI boom. While many AI stocks focus on chips or software, storage demand is becoming equally important as data volumes explode. If current supply constraints persist, Sandisk could continue benefiting from stronger pricing power and expanding profitability for years.