Sandisk has been one of the market’s most explosive performers, appreciating roughly 2,740% over the past year. Despite that dramatic advance, Evercore ISI on Monday began coverage of the NAND flash memory manufacturer with an Outperform rating and a $1,200 12-month price target, signaling the firm sees additional upside from current trading levels near $952.
The Evercore price objective implies about 26% upside from existing prices and contrasts with a bull scenario the broker outlines at $2,600. The firm’s 12-month target is built from a valuation multiple of 12 times Evercore’s fiscal year 2027 (FY26) earnings per share estimate of $99.49, a forecast that sits above the prevailing Wall Street consensus EPS expectation of $94.49.
Sandisk shares rose more than 2% in premarket trading Tuesday.
Evercore’s positive stance rests on several pillars that the analysts say distinguish the current NAND cycle from prior up-and-down episodes. The team, which includes analysts such as Amit Daryanani, argues that demand tied to artificial intelligence workloads is structurally tightening the supply-demand balance for NAND, supporting higher pricing profiles through at least 2027.
One notable development cited by Evercore is the growth of long-term contractual arrangements between hyperscalers and NAND suppliers - described as Strategic Contractual Agreements or SCAs. These deals typically incorporate upfront cash payments and pricing floors, providing memory vendors with improved demand visibility and reduced exposure to the kind of sudden oversupply that has historically pressured results in this sector.
Supply discipline is another key element of Evercore’s thesis. The analysts write that industry bit demand is projected to outpace supply growth into 2026, as capital spending shifts toward DRAM and high-bandwidth memory rather than additional NAND capacity. "Unlike prior cycles characterized by aggressive capacity additions, vendors are now focused on supply-demand alignment and return optimization rather than pure bit growth," the analysts wrote.
Evercore also highlights Sandisk’s longstanding manufacturing joint venture with Japan’s Kioxia. That partnership, the analysts note, gives Sandisk access to roughly 40% of total production capacity while avoiding the entire capital burden of a fully integrated foundry model. The broker contends this structure allows Sandisk to operate at scale with a more efficient capital footprint, supporting stronger through-cycle margins and healthier free cash flow compared with fully integrated peers.
The firm points to a favorable revenue mix trend as well. Data center customers currently contribute less than 15% of Sandisk’s sales, but Evercore expects that share to grow to above 20% by fiscal 2027. That shift toward higher-margin enterprise storage sales is anticipated to be driven by hyperscaler demand and the ramp of new products, including Sandisk’s BiCS8 218-layer NAND chip.
From an earnings perspective, Evercore sees a plausible path to per-share profits exceeding $130 over the medium term. The drivers the analysts cite include stronger-than-expected NAND pricing, accelerated cost reductions, continued bit demand growth, a revenue mix shift toward enterprise storage, and the possibility of a share buyback program.
On valuation, Evercore notes Sandisk trades at roughly 8 times forward earnings, below its historical average near 10 times. The analysts argue that this discount does not fully reflect the improving underlying fundamentals and that the combination of near-term EPS upside and the potential for multiple expansion supports their positive view. "We view SNDK as transitioning from a cyclical memory name to a structural AI beneficiary, with a favorable risk/reward," the analysts wrote, while also acknowledging the prospect of eventual NAND pricing normalization.
Evercore does identify a set of risks that could undermine its bullish case. Those include a faster-than-expected capacity response from major suppliers such as Samsung, SK Hynix, Micron or Chinese producers; a rapid normalization of average selling prices; execution hurdles in gaining traction with hyperscaler customers; and a slowdown in AI infrastructure spending.
Takeaway
Evercore’s initiation frames Sandisk as a beneficiary of structural shifts in AI-driven storage demand, enhanced contractual protections via SCAs, and a capital-efficient manufacturing footprint through its Kioxia joint venture. The broker’s $1,200 target and $2,600 bull case rest on continued pricing strength, favorable mix changes and strong free cash flow dynamics, although several supply-side and execution risks remain.