It appears the pullback in Sandisk (NASDAQ: SNDK) was a very solid opportunity.

Just days ago, the stock dropped after reporting adjusted earnings of $39.25 per share for its fiscal fourth quarter, well above Wall Street’s expectations of $34.96 per share. Revenue also came in stronger than expected at $8.97 billion, beating analysts’ forecasts of $8.48 billion.

Unfortunately, investors weren’t too happy with guidance. 

The company said it expects adjusted earnings to be between $44 and $46 per share, with the midpoint above the $44.72 per share estimate. Revenue is forecast to be between $10.3 billion and $10.8 billion, with the midpoint of $10.55 billion below the $10.82. billion estimates.

Since then, the stock has started to pivot higher.

Helping, Wall Street is Just as Bullish

For one, just this morning, JPMorgan analysts say there are more gains ahead.

In fact, with an overweight rating and a price target of $2,250, the firm noted that SNDK is in many respects uniquely positioned to capture the ongoing structural inflection in NAND demand driven by rapid growth in AI inference,” as quoted by CNBC.

Two, as noted by Barclays analysts, as quoted by Yahoo Finance, “The company signed 5 new NBM deals at $94B minimum revenue and $91B RPO. These deals lock up 50% of FY27 bits and ~2/3 of FY28 bits. The company also expects to continue major buybacks with excess cash after doing $4.5 billion in June. Overall, the story here remains the same, and we think Sandisk is attractive on a pullback.”

We also have to consider that the rapid rise of AI is forcing companies to demand massive amounts of computing power.  Companies, including Amazon, Meta Platforms, and Alphabet, are spending hundreds of billions of dollars building new data centers to support AI applications. These facilities require enormous quantities of advanced hardware, creating strong demand for memory products.

And since demand has been much higher than available supply, memory manufacturers like Sandisk have been able to increase prices. Higher pricing, combined with strong customer demand, has significantly boosted the company’s sales and profits over the past year.

All of which is a strong catalyst for the SNDK stock.

Sincerely,

Ian Cooper