Investing.com -- Shares of SanDisk climbed about 5% in premarket trading Monday after Wall Street analysts raised their price targets on the stock, citing tight supply-demand conditions in the NAND flash market and strong near-term pricing momentum.

Bank of America lifted its price objective to $2,100 from $1,550, after SanDisk investor relations representatives attended the bank’s 2026 Global Technology Conference in San Francisco.

The company offered no update to its guidance, but investor discussion centered on SanDisk’s multi-year supply partnerships with customers, which the company calls new business models (NBMs).

The contracts feature fixed pricing for an initial period followed by variable pricing, and are structured so that margins remain within guidance range even if pricing hits the floor.

BofA analyst Wamsi Mohan views the arrangements as "win-win" as they lock in committed supply for customers and committed financials for SanDisk. The bank reiterated its Buy rating on the stock, citing “valuation, beneficial joint venture partnership, share gains, and long-term potential for industry consolidation.”

So far, SanDisk has signed more than a third of its fiscal 2027 revenue through NBMs. The five agreements signed to date include financial guarantees exceeding $11 billion, along with $400 million in prepayments managed by third-party financial institutions.

Because of SanDisk’s improved margin structure, the company can now afford to cut production if demand slows. “In the past, the company would have had to continue to produce wafers in order to generate cash,” the analysts noted.

BofA lifted its fiscal 2027 revenue and EPS estimates to $44 billion and $188, respectively, from $37.7 billion and $154 previously, reflecting "strong trends in pricing and continued strong demand." Incremental supply growth is not expected until 2028 or 2029.

Mizuho also raised its price target on SanDisk to $2,200 from $1,825, maintaining an Outperform rating. Analyst Vijay Rakesh cited the same broader tailwinds driving NAND demand, including AI workloads pushing enterprise solid-state drive consumption and reasoning tokens driving context window requirements above two million.

Rakesh noted that SanDisk and other NAND players "are benefiting from demand outpacing supply in the NAND market, driving higher pricing," with AI continuing to fuel demand across handsets, PCs, and server end markets.

He sees NAND wafer starts declining about 5% in fiscal 2026 before recovering modestly, with no significant new supply expected to come online until 2028.