SanDisk Corp. (NASDAQ:SNDK) saw its share price jump by 8.88 percent on Monday to finish at $1,786.85 apiece, after earning a buy recommendation from JPMorgan.
In its updated market note, the investment firm raised its price target for the stock to $2,250, while maintaining an overweight rating, amid its position as one of the top global NAND flash memory suppliers in a market experiencing demand expansion from the artificial intelligence sector.
Additionally, JPMorgan noted the new business model framework, which covers eight key customers with committed volumes and minimum financial guarantees that account for approximately 50 percent of bits in fiscal 2027 and roughly two-thirds of bits in fiscal 2028.
Photo from Sandisk’s website
Lastly, SanDisk Corp.’s (NASDAQ:SNDK) technology roadmap includes unveiling the BiCS9 and BiCS10 QLC nodes at Investor Day, with the latter delivering a 60 percent higher bit density as compared with BiCS9.
Mid-to-High Teens Revenue Growth
At the Investor Day, SanDisk Corp. (NASDAQ:SNDK) likewise issued a “mid-to-high teens” revenue growth guidance for fiscal years 2028 to 2030.
Non-GAAP gross margins are projected at approximately 80 percent, while non-GAAP operating margins are expected at 75 percent.
“As we unveil our new financial model for FY2028 through FY2030, we believe that we have a unique opportunity as we play in a large and fast-growing market with favorable tailwinds and that we are well positioned to capture the opportunity,” Chief Finance Officer Luis Visoso said.
“We are optimizing for growth, sustainability and returns. As we do that, we expect to return 100 percent of excess cash to our shareholders after investing in the business. Our confidence in the sustainability of the model comes from our multi-year NBMs that are based on intimate relationships with our customers and grounded in innovation and collaboration,” he noted.
Hedge Fund Participation, Conviction Soar
Latest filing showed that Leopold Aschenbrenner-led hedge fund Situational Awareness held $5.7 billion worth of shares in Sandisk Corp. (NASDAQ:SNDK) as of end-June, before he disposed of a large chunk of its portfolio in AI stocks in July.
In the said period, its positions in memory and storage chipmakers accounted for 56 percent of a US stock portfolio worth just over $20 billion.
On the broader side, some 114 hedge funds held positions in the company as of the first quarter of the year, up markedly from 75 previously.
More notably, their combined holdings soared by 105 percent to $11.3 billion from $5.5 billion, signaling that institutional investors were not only establishing positions but were also committing large capital over its long-term growth prospects.
While we acknowledge the risk and potential of SNDK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNDK and that has 10,000% upside potential, check out our report about the cheapest AI stock.
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