Evercore ISI launched coverage of Sandisk with an Outperform rating and set a $1,200 price target, implying 26% upside from current levels near $952. The $1,200 target is based on 12 times the firm’s fiscal year 2027 EPS estimate of $99.49, compared with the $94.49 Wall Street consensus, and a bull case price of $2,600.

Analysts highlight that AI-driven demand for data storage is structurally tightening the NAND flash supply-demand balance, making the current upcycle more durable than past cycles. They expect industry bit demand to outpace supply growth into 2027, sustaining elevated pricing and improving margin visibility.

Emerging Strategic Contractual Agreements (SCAs) between cloud providers and NAND suppliers include upfront cash payments and pricing floors, giving memory makers like Sandisk enhanced demand visibility and cushioning against historical oversupply risks. Capital is increasingly allocated to DRAM and high-bandwidth memory rather than aggressive NAND capacity additions.

Sandisk’s joint venture with Japan’s Kioxia grants access to roughly 40% of NAND production without bearing the full capital burden, supporting superior through-cycle margins and strong free cash flow. The company’s revenue mix is shifting toward higher-margin data center customers, expected to grow from under 15% today to over 20% by fiscal 2027 with the roll-out of its 218-layer BiCS8 NAND chip.