Rosenblatt Initiates Sandisk at 'Buy,' Citing AI-Driven Shift in NAND Market

Rosenblatt initiated coverage of Sandisk with a Buy rating and a $2,400 price target, positing that the artificial intelligence boom is fundamentally repositioning NAND flash memory from a commodity to a crucial piece of computing infrastructure.

AI's Impact on the Memory Market

In a note published Tuesday, Rosenblatt analyst Kevin Cassidy argued that the demands of new AI compute platforms are changing the dynamics of the NAND market. He stated that growing AI model sizes and data-intensive workloads now prioritize attributes like density, performance, and supply certainty over simply the lowest price.

This shift, according to the analyst, presents an opportunity to reposition NAND "from a commodity storage medium to a more system-critical component of AI infrastructure." The note suggests this marks a structural change that benefits specialized producers.

Sandisk's Competitive Position

Cassidy highlighted Sandisk's technology roadmap, developed with manufacturing partner Kioxia, as a key competitive advantage. The firm's BiCS8 and BiCS10 platforms are expected to deliver improved density with fewer 3D layers than some rivals, which Rosenblatt believes will sustain a cost and performance edge in AI-oriented enterprise storage.

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Furthermore, the analyst pointed to new business agreements with eight of the largest NAND customers. These deals, potentially covering 65% of fiscal 2028 production, are expected to enhance demand visibility and mitigate the historical volatility characteristic of the memory sector.

Valuation and Financial Targets

Rosenblatt's price target is based on a 10x multiple of its fiscal 2028 earnings estimate, a valuation Cassidy called conservative given the growth outlook. The target also reflects potential execution risks and the possibility that the NAND market could revert to cyclical, commodity-like pricing.

Based on Sandisk's strategic positioning, the analyst conservatively estimated the company could achieve non-GAAP earnings of about $300 per share by fiscal 2030. The initiation note also referenced Sandisk management's long-term financial framework, which includes:

• Mid-to-high-teens revenue growth from fiscal 2028 to 2030.
• Approximately 80% non-GAAP gross margin.
• A 50% adjusted free-cash-flow margin.