Why Sandisk Stock Bounced Back Today

Sandisk (NASDAQ: SNDK) banal took a tumble connected Thursday, sliding 5% connected a study from Wall Street banker Bernstein that highlighted occupation successful the spot marketplace for machine memory.

On Friday, shares of the fashionable machine memory-maker bounced 8.5% done 10:15 a.m. ET -- and I've got a hunch Bernstein is down this question arsenic well.

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What Berstein says astir Sandisk

The crux of yesterday's informing was this: Computer representation proviso is successful deficit. There's not capable to spell astir to enactment each the artificial quality chips that Nvidia (NASDAQ: NVDA), AMD (NASDAQ: AMD), and the remainder are churning out. Customers are bidding against each different and driving prices up.

Problem is, NAND and DRAM prices person gotten truthful precocious that now, "OEMs & module houses [are being forced to] trim their purchases." Near term, this could origin terms hikes to "decelerate notably into 3QCY26," perchance slowing Sandisk's nett growth.

What does this mean for Sandisk?

So that's the atrocious quality -- but here's the bully news: DRAM prices soared 57% successful April versus mean prices successful Q1. NAND prices were up 65% to 70%, according to Bernstein. So adjacent if immoderate buyers are forced to curtail purchases successful Q2, those who person the wealth to walk volition proceed buying memory, driving "major" increases successful some DRAM and NAND successful Q2 2026, presently underway.

Long communicative short, portion it's uncertain what the aboriginal whitethorn clasp mean oregon agelong term, successful the adjacent word astatine least, Sandisk's guidance for $8 cardinal successful (fiscal) Q4 sales, rising gross margins, and profits betwixt $30 and $33 per stock should beryllium safe. (Recall that Sandisk's fiscal calendar is 2 quarters up of the existent calendar year.)

And Bernstein inactive thinks Sandisk is simply a bargain astatine up to $1,700 a share.

Should you bargain banal successful Sandisk close now?

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