Sandisk Stock Jumps 4% After Melius Buy Call, $1,350 Target

Sandisk stock, which had already reached an all-time high near $990 at the end of last week, continued their upward momentum at the start of the new trading week. By mid-morning, the stock had advanced approximately 4.2%, reflecting investor response to the bullish analyst outlook.

Melius Research’s initiation marked a significant catalyst for the stock, with the firm highlighting both near-term strength and long-term growth potential. The $1,350 price target suggests that the rally may not yet be fully priced in, according to the analyst note cited by TheFly.com.

AI Demand Driving Growth

The core of the bullish thesis centres on Sandisk’s role in the artificial intelligence ecosystem. The company produces computer memory that works alongside high-performance AI chips, enabling faster data processing and supporting advanced computing workloads.

Melius Research noted that demand for high-bandwidth memory remains unusually strong, supported by rapid adoption of AI technologies across industries. The firm added that both demand levels and profit margins are exceeding typical semiconductor cycle expectations.

According to the analysis, the AI-driven growth phase may extend through the remainder of the decade, challenging traditional assumptions about the cyclical nature of semiconductor markets.

Sandisk’s financial trajectory has shown a notable turnaround. After reporting losses for three consecutive years, the company returned to profitability this year. Analyst estimates project earnings of $41.75 per share in 2026, with a sharp increase to more than $107 per share in 2027.

Despite expectations of a gradual decline in earnings beyond the peak cycle, forecasts indicate the company could still generate approximately $43 per share by 2030. This suggests a sustained level of profitability even as market conditions normalise.

At current levels, the stock is trading at under 25 times earnings, both on near-term and longer-term projections. This valuation has been cited as relatively modest given the scale of anticipated earnings growth and the company’s positioning within the AI supply chain.

Market Skepticism and Cyclical Risks

Investor hesitation remains a key factor influencing valuation. The semiconductor industry has historically been cyclical, with periods of rapid expansion followed by sharp downturns. Many market participants continue to expect a similar pattern to emerge.

Melius Research argues that this scepticism is limiting the stock’s multiple expansion. The firm believes that if investors begin to view the current AI-driven cycle as structurally different, valuation multiples could increase significantly.

However, risks persist. If demand for AI-related memory moderates or if pricing pressures emerge, Sandisk’s earnings trajectory could follow a more traditional cyclical decline. The company’s recent return to profitability also underscores its sensitivity to industry conditions.

The broader semiconductor sector has been buoyed by rising investments in artificial intelligence infrastructure. Companies involved in producing chips, memory, and related components have seen strong investor interest, with firms such as Nvidia and Intel also benefiting from the trend.

Sandisk’s positioning within this ecosystem, particularly in high-bandwidth memory, places it at a critical intersection of hardware demand. This has made the company a focal point for investors seeking exposure to AI-driven growth themes.

While the long-term sustainability of the current demand cycle remains uncertain, the immediate outlook continues to support elevated activity levels across the semiconductor value chain.

The latest analyst endorsement highlights growing confidence in Sandisk’s ability to capitalise on these trends, even as broader market debates continue over whether the current cycle represents a structural shift or a temporary surge.