Up more than 2,000% over the last year, shares of Sandisk (SNDK) could rally even more heading into third-quarter earnings on April 30. Despite its massive run, Wall Street analysts still believe the stock has significant upside, driven by surging demand for NAND memory and improving pricing conditions.

In fact, analysts at Bernstein still say it’s undervalued.

According to Bernstein analyst Mark Newman, if average selling prices for NAND memory offerings jump 75% sequentially in the March quarter, and another 75% in the June quarter, the stock could rally to $3,000 a share, which is very possible.

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For the time being, the analyst now has a Street-high target of $1,250, noting that the market is significantly undervaluing earnings power and cycle sustainability. 

Analysts at Cantor Fitzgerald are also bullish, raising their price target to $1,000.  All thanks to stronger-than-expected NAND flash pricing.  

We also have to consider that artificial intelligence will continue to create massive demand for data centers, which will lead to further demand for NAND. After all, NAND is a vital part of the AI infrastructure for massive amounts of data storage, speed, and performance. We also have to consider that demand for more data centers (which will need more NAND) is exploding.Consider this. According to MIT Technology Review, there are about 3,000 data centers across the U.S. Plus, according to a report from McKinsey, $5.2 trillion in AI infrastructure investments will be needed by 2030. Again, growing demand for data centers will mean growing demand for more NAND memory in an already tight market.

Sincerely,

Ian Cooper