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Shares in the US storage manufacturer SanDisk (SNDK.US) have risen by over 40 per cent over the past two weeks. This sharp rise is the result of growing optimism on Wall Street, fuelled by the company’s new long-term financial forecasts and strategic changes to its business model, which are designed to reduce the industry’s historical cyclicality and fully capitalise on the artificial intelligence boom. SanDisk’s share price rose by nearly 6.5% today alone, extending the 12% rally from the previous trading session. The immediate catalyst for the rise was Investor Day, during which the management presented its targets for 2028–2030.
Key drivers of growth
- Ambitious long-term forecasts: SanDisk expects annual revenue growth in the mid-to-high teens between 2028 and 2030. The company also expects to maintain its gross margin (non-GAAP) at around 80 per cent.
- New Business Model (NBM): The company is moving away from short-term orders in favour of multi-year contracts with data centre operators. SanDisk has entered into agreements worth at least US$93.9 billion, which secure minimum prices and guarantee revenue stability. In the 2027 financial year, around half of production is expected to be sold under these contracts.
- Support from Wall Street: Bank of America has maintained its ‘Buy’ recommendation with a target price of US$2,500. Analysts emphasise that the market continues to be too cautious in its assessment of the sustainability of current profits, which are being driven by growing demand for memory used in artificial intelligence.
- Development of HBF technology: SanDisk, in collaboration with South Korea’s SK hynix, is developing the High Bandwidth Flash (HBF) standard. The new technology is intended to bridge the gap in the market between expensive HBM memory and high-capacity NAND memory, meeting the growing demands of data centres.
The technical situation on the chart
SanDisk’s rebound from around the $1,000 support level was extremely sharp, propelling the share price above key moving averages. From a technical analysis perspective, it is worth noting that SanDisk shares are currently testing an important resistance level marked by the 2 standard deviation Bollinger Band on the 22-day moving average – which is roughly the average number of trading days in a month. Breaking through this resistance level could pave the way for further gains and a return towards all-time highs; however, it is worth bearing in mind that the memory sector remains sensitive to global supply and the actions of competitors. The stabilising effect of long-term contracts will now be crucial for the company’s future share price.
