Bank of America Maintains SanDisk "Buy" Rating, AI Storage Demand May Drive Sustained Earnings Growth
TechFlow news, August 8, Bank of America maintains a bullish rating on SanDisk following the release of its latest financial report, stating that AI infrastructure expansion may drive continuous growth in storage demand, and the company's profitability may be stronger than market expectations.
BofA reaffirmed SanDisk's "Buy" rating and maintained a price target of $2,500. This target is based on an expected earnings per share of $255 for 2027 and a valuation of approximately 10 times P/E ratio, implying about 85% upside potential compared to the reference share price of $1,350.5.
BofA stated that SanDisk was previously viewed by the market as a typical cyclical stock, but with the development of artificial intelligence driving increased data storage demand, and the increase in enterprise SSD penetration, the company's current profitability level may have stronger sustainability.
Financial report data shows that SanDisk's revenue for the fourth fiscal quarter reached $8.97 billion, a sequential increase of 51%, exceeding the company's previous guidance of $7.75 billion to $8.25 billion. Of this, about two-thirds of the growth came from product price increases, and the rest from increased storage bit shipments.
During the same period, the company's gross margin rose to 84.6%, higher than 78.4% in the previous quarter, and exceeded the previous expected range of 79% to 81%.
BofA expects SanDisk's earnings per share for fiscal year 2027 to grow 229% to $233.85, and revenue to grow 160% to $52.6 billion. The company expects revenue for the next fiscal quarter to be $10.3 billion to $10.8 billion, earnings per share to be $44 to $46, and gross margin to remain in the 83% to 85% range.
BofA stated that there are currently no obvious signs that SanDisk's storage prices and profitability have reached a peak, and the growth in storage demand driven by AI infrastructure construction may continue to support the industry upcycle.
