SanDisk NASDAQ:SNDK rose 6.43% intraday after Bernstein analyst Mark Newman raised his price target to $3,000 from $1,700, reiterating an Outperform rating. The upgrade centers on how memory makers are now structuring long-term supply agreements, which Newman says materially reduce the risk of severe earnings swings during industry downturns. He said the new generation of contracts differs sharply from older ones, which had been "extremely lopsided in favor of the customer," featuring fixed or range-bound pricing and upfront financial commitments that protect suppliers' downside over three-to-five-year terms.
Bernstein estimates SanDisk's floor price under recently signed agreements at $0.29 per gigabyte, in line with its second-quarter 2026 average selling price estimate, compared with a floor for rival Micron NASDAQ:MU that sits meaningfully below current market levels. Modeling a worst-case scenario where customers walk away from contracts whenever it saves them money, Bernstein estimates SanDisk's fiscal 2030 EPS would still reach $214 with 60% of volumes covered by LTAs, even under a 72% peak-to-trough price decline, versus $81 without that protection. The firm also raised its base-case estimates to $243 for fiscal 2027 and $272 for fiscal 2028, with bull-case estimates of $350 and $400.
The move follows Citigroup NYSE:C raising its target to $2,500 on June 25. TrendForce data shows NAND contract prices rose 33-38% quarter-on-quarter in the first quarter, later revised to 55-60%, with a further 70-75% increase in the second quarter.