Sandisk stock rose 27% yesterday. Here’s why

Investing.com -- Sandisk shares surged over 27% on Tuesday, with Bank of America highlighting in a note that the stock received a boost following the Consumer Electronics Show in Las Vegas.

The bank stated that the company is positioned to benefit from a major shift in artificial intelligence hardware design, raising its price objective to $390 from $300.

BofA analyst Wamsi Mohan wrote that NAND memory is “becoming a more important tier in AI inferencing” following announcements at the CES, where Nvidia CEO Jensen Huang unveiled new chips designed to handle larger context windows through a dedicated storage tier linked via Nvidia’s BlueField-4.

According to BofA, this development “elevates NAND to a more prominent tier in AI workloads/performance and allows for significant performance improvements.”

The firm reiterated its Buy rating, citing valuation, asset value, expected cost reductions and market share gains in enterprise SSDs.

Mohan said demand remains “strong and pricing robust,” with TrendForce data showing NAND prices could jump “+20–30% q/q in 4Q followed by another 30%+ increase in 1Q.” BofA said it sees “significant upside to estimates” as manufacturers manage capacity tightly and shift output toward higher-margin segments.

“We note that Sandisk remains committed to managing capacity prudently and allocation of bits can change over time across the end markets to target higher margin areas. eSSDs are the most active area for customer engagement, focusing on their BiCS8-based eSSDs and next-gen platforms such as Stargate,” wrote Mohan.

While margins are not yet at full levels due to startup costs and underutilization, the bank said they “should improve with scale.”

The firm also noted that Sandisk expects to grow in line with industry demand of the “mid-teens to low-20s in C26,” and will only consider adding capacity if long-term agreements ensure sustainable pricing and margins.

BofA lifted its fiscal 2026 estimates meaningfully, saying its revenue and EPS projections now reflect higher margins and profitability.

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