SanDisk shares have pulled back after the company’s latest earnings report, but Argus Research says the recent decline has opened a buying opportunity as AI-driven storage demand continues to support the long-term case.
According to BlockBeats, Argus Research analyst Jim Kelleher upgraded SanDisk to Buy from Hold and set a 12-month price target of $1,600. Kelleher said the firm had been waiting for a better entry point when it initiated coverage in July, and that the stock’s sharp retreat from prior highs has now created that window.
Stock fell after guidance missed expectations
SanDisk reached a record high of $2,335 on June 25 and has kept falling since then. The stock is now down about 47% from that peak. Last week, after the company released quarterly results, shares dropped 6.8% in one session because forward guidance came in below market expectations. The stock then fell another 3.7%.
Argus points to AI data center demand
Kelleher said SanDisk is still in the early phase of a multi-year cycle of faster revenue growth and expanding margins. He said the buildout of AI data centers is driving a surge in storage demand, while major cloud companies including Amazon, Meta, and Google parent Alphabet continue to commit hundreds of billions of dollars to infrastructure.
In his view, the supply-demand gap for storage components is widening. He also expects margins to keep improving because the company’s revenue growth is running well ahead of cost growth.
Shares remain sharply higher over longer periods
Despite the latest pullback, SanDisk stock is still up about 422% this year and 2,757% over the past 12 months. Argus said the AI infrastructure investment cycle could still provide a fresh growth driver for the company.