Bank of America has reaffirmed its "Buy" rating on SanDisk after the company's latest earnings, maintaining a $2,500 price target that implies roughly 85% upside from the reference price of $1,350.5. The bank says the market is underestimating SanDisk's long-term profitability as AI-driven demand for data storage grows. The price objective is based on 2027 expected EPS of $255, or about 10 times earnings. SanDisk, often treated as a cyclical stock, delivered fiscal Q4 revenue of $8.97 billion, up 51% sequentially and above its guidance of $7.75 billion to $8.25 billion. Gross margin jumped to 84.6% from 78.4% a quarter earlier, also exceeding the company's 79% to 81% outlook. BofA forecasts FY2027 EPS to surge 229% to $233.85, with revenue climbing 160% to $52.6 billion. The company guides next-quarter revenue of $10.3 billion to $10.8 billion and EPS of $44 to $46. The bank sees no clear sign that storage prices or margins have peaked, suggesting the current AI-fueled upcycle could persist.
Bank of America reiterated its "Buy" rating on SanDisk after the company's latest quarterly earnings, keeping a $2,500 price target that implies roughly 85% upside from the reference price of $1,350.5.
The bank argues that the market underestimates SanDisk's long-term earnings power driven by AI-related storage demand. The target is based on expected 2027 EPS of $255, implying a forward P/E of about 10 times. SanDisk has historically been viewed as a typical cyclical stock, but BofA believes the current profit level could prove more durable than expected, as AI development boosts data storage demand and enterprise SSD penetration rises.
SanDisk reported fiscal fourth-quarter revenue of $8.97 billion, up 51% quarter over quarter, beating its own guidance of $7.75 billion to $8.25 billion. Roughly two-thirds of the growth came from higher product prices, with the rest from increased storage bit shipments. Gross margin rose to 84.6%, up from 78.4% in the prior quarter and above the guided range of 79% to 81%.
BofA projects SanDisk's FY2027 EPS will grow 229% to $233.85, while revenue is expected to rise 160% to $52.6 billion. The company guided next quarter revenue of $10.3 billion to $10.8 billion, EPS of $44 to $46, and gross margin of 83% to 85%.
The bank said it sees no clear signs that storage prices and profitability have peaked, adding that AI infrastructure expansion could continue to support the industry's upcycle.
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