Sandisk: It's The Perfect Time To Load Up

[Bong Hwan Ahn]

Sandisk: It's The Perfect Time To Load Up

Sep 06, 2026, 9:46 AM ETSandisk Corporation (SNDK) Stock, SNDK:CA Stock

• Sandisk’s 8 multiyear deals with datacenter players provide substantial revenue visibility, covering 50% of FY27 and 67% of FY28 bit shipments.
• Sandisk’s Kioxia joint venture lowers capital intensity through shared technology development, manufacturing tools, and NAND production capacity through 2034.
• High-bandwidth flash (HBF) could address AI inference memory-capacity constraints, with 2027 product launch plans creating upside beyond Sandisk’s current long-term financial outlook.
• Sandisk trades above memory peers on a 1-yr fwd EV/EBITDA basis, but high earnings growth projections, supported by long-term contract visibility, make the stock look cheap.
• SNDK's correction seems to be over as the bulls are defending grounds and pushing up from a key technical support level amid a broader, healthy uptrend.

AKart Design/iStock via Getty Images

Performance Assessment

Sandisk (SNDK) has undergone a correction, which has still outperformed the broader market index since my last bullish update:

Performance since Hunting Alphas' Last Article on SNDK (Seeking Alpha)

Elevator Pitch

I recently upgraded memory stock Micron Technology, Inc. (MU) to a Strong Buy. And although there are reasons to be a little bit more bullish on DRAM than NAND, I still see strong reasons to be bullish on NAND-specialist player Sandisk:

1. Sandisk has arguably decoupled its financials from an industry downturn
2. Sandisk's JV with Kioxia makes it far more capital efficient than competitors
3. High-bandwidth flash presents an upside to the company's projections
4. SNDK looks rich vs. peers but cheap vs. its growth prospects
5. SNDK looks ready to resume its march north

If you are new to the semiconductor memory market and hence unfamiliar with DRAM, NAND Flash, SSDs, and HBM, please read my initiating coverage on Micron, where I have provided a layman's explanation of all this jargon. You can also get an introduction to HBM Flash here.

Sandisk Has Arguably Decoupled Its Financials From an Industry Downturn

The NAND market is notorious for being highly cyclical. But via its new long-term agreement business model (NBMs), Sandisk has arguably decoupled its financials from the risks of an industry-wide downturn:

Commencing in fiscal 2026, we entered into long-term agreements, which we also refer to as New Business Models, or “NBMs,” with several Datacenter and Edge customers. These agreements generally commit us to deliver, and our customers to purchase, a stated volume of products, mostly over multi-year periods. The agreements include pricing mechanisms consisting of fixed and variable components and are supported by financial guarantees that are intended to provide additional protection in the event a customer does not satisfy their contractual purchase obligations. As NBMs are expected to become our predominant way of doing business, we believe that this business model will contribute to greater predictability of revenue, support production planning, and enhance supply assurance for our customers. While these agreements do not eliminate the risks associated with customer demand, market conditions, or operational execution, we believe they reduce certain elements of industry cyclicality and support our long-term strategic and financial objectives.

- FY26 10K

Sandisk has locked in multi-year agreements with 8 datacenter customers, which include 3 US hyperscalers. Altogether, the magnitude of business orders locked in is a minimum TCV of $93.9B. This gives the company a great amount of visibility, covering 50% of bit shipments in FY27 and an even higher 67% of bit shipments in FY28. Note that among other memory players, Sandisk has the highest disclosed value of long-term agreements:

Long Term Agreements Detail (TrendForce)

And on the pricing and gross margins side, Sandisk has negotiated pricing terms that lead to an 80% gross margins floor through to FY30:

Well, pricing will be fixed in some of these contracts. Some of them include variable portions. And very importantly, the variable portions include floors and ceilings, and our financials are very attractive even at floor pricing. We talked about around 80% gross margin for the floor pricing. So we believe there is upside to that pricing, and therefore, we feel very good about the financials of the new business models.

- CFO Luis Visoso in the 2026 Investor Day Call

I need to stress how much of a significant achievement it is for Sandisk because it is locking in peak-cycle margins for the next 4 years:

Gross profit margins (Company Filings, Hunting Alphas)

Sandisk's JV With Kioxia Makes It Far More Capital-Efficient Than Competitors

Sandisk has a 25-year-old manufacturing joint venture (JV) with Kioxia Holdings (KXIAY) (KXHCF). This has been extended another 8 years until the end of CY34:

In January, Kioxia and Sandisk announced the extension of their joint venture framework at Kioxia’s Yokkaichi Plant through December 2034. Through the joint venture, which has spanned more than 25 years, Kioxia and Sandisk collaborate in the development and manufacturing of flash-based memory wafers.

- Sandisk Press Release, Seeking Alpha News

With this JV, Sandisk can co-develop technologies and share manufacturing tools across the Yokkaichi and Kitakami facilities in Japan. The shared footprint means Sandisk and Kioxia Holdings have the largest NAND manufacturing operation in the world with control of 33% of global wafer production.

Compared to their peers, Sandisk and Kioxia Holdings have extended their capex efficiency per petabyte of storage output:

Capital Efficiency of Sandisk + Kioxia vs. Industry (SNDK FY26 Investor Presentation Slide 20)

Sandisk has attributed this to R&D innovations and a high focus on tool reuse in the manufacturing lines.

High-Bandwidth Flash Presents Upside to the Company's Projections

Sandisk and SK hynix (SKHY) have jointly established the HBF standard to address some memory capacity bottlenecks in HBM. HBF allows for 8-16x higher memory capacity at a particular bandwidth (a measure of data transfer speed), making it especially relevant for high-context AI inference workloads:

HBF Characteristics (SNDK FY26 Investor Presentation Slide 83)

An HBF configuration with 4 GPUs is almost as good as an HBM configuration with 8 GPUs in terms of inference output:

HBF vs. HBM GPU Efficiency in Performance (SNDK FY26 Investor Presentation Slide 88)

Sandisk has finalized and designed its first HBF chip design and remains on track for a launch in CY27 and mass production in CY28. From a customer's perspective, it has garnered support from major cloud and AI players such as Alphabet (GOOGL) (GOOG), Meta (META), and next-generation computing company Tenstorrent. A key catalyst would be Nvidia's (NVDA) adoption. That is still pending, but given the traction and positive industry sentiment on HBF so far, I expect this to materialize in a year's time:

HBF Status Summary (TrendForce)

The good news is that the HBF scale-up and commercial adoption catalyst is not counted in the company's current FY28 to FY30 financial projections that target a mid-to-high teens revenue CAGR. So if and when this plays out, I believe it can lead to successive quarters of high revenue beats to the tune of more than 20%, continuing the recent trend of beats:

Revenue Surprise vs. Consensus (Capital IQ, Hunting Alphas)

SNDK Looks Rich vs. Peers but Cheap vs. Its Growth Prospects

Relative to its memory semiconductor comps, SNDK is trading at the most expensive 1-yr fwd EV/EBITDA multiple at 6.3x vs. the average 4.1x of its peers:

1-yr fwd EV/EBITDA Comps (Seeking Alpha)

This 54% premium over its comps is a bit higher than the long-term median average premium of 40% too:

SNDK 1-yr fwd EV/EBITDA vs. Peers vs. Time (Seeking Alpha)

So from this perspective, SNDK looks a bit rich on a relative valuation perspective. But offsetting this risk is the fact that the implied 10-yr earnings growth CAGR is 22%, assuming a reasonable long-term PE exit multiple of 7.8x:

Reverse DCF Style Inputs & Assumptions and Implied Earnings Growth CAGR Result (Company Filings, Seeking Alpha, Hunting Alphas)

You can read more about this valuation methodology here.

And so far, counting the years which have more than 1 Wall St. analyst's estimates, the 4-yr earnings CAGR is well above this run-rate requirement at almost 47%:

SNDK Consensus EPS Estimates (Seeking Alpha)

Hence, relative to its growth prospects, I argue that SNDK's valuations still look cheap.

SNDK Looks Ready to Resume Its March North

If this is your first time reading a Hunting Alpha article using Technical Analysis, you may want to read this post, which explains how and why I read the charts the way I do. All my charts reflect total shareholder return as they are adjusted for dividends/distributions.

SNDK Technical Analysis

SNDK Technical Analysis (TradingView, Hunting Alphas)

SNDK's overall uptrend is still very healthy. The stock has printed a nice bullish reaction from a key support level at around $1280 after a correction phase. It looks like another bullish engulfment is in the making in the weekly charts. I expect further upside to follow suit.

Takeaway & Positioning

• Fundamental Thesis: Bullish as the company's long-term contracts lock in significant demand visibility and peak-cycle gross margins for the next 4 years, the company has a commanding, highly capital-efficient lead in the NAND market, and HBF Flash is a nice upside catalyst.
• Valuation: Neutral, as a rich relative valuation is offset by apparent undervaluation relative to its earnings growth prospects.
• Technical Analysis: Bullish due to a strong uptrend and apparent readiness to resume the march north after a correction.
• Final Assessment and Rating: Bullish, Strong Buy.