SNDK Stock Edges Up Overnight: Jefferies Slashes Price Target By Nearly 50% On Memory Growth Concerns

• Jefferies warned that recent inventory accumulation in SanDisk’s edge business could eventually weigh on demand, while the data center chips business is likely to moderate.
• SanDisk issued a Q1 forecast that missed Wall Street’s high expectations.
• Stocktwits sentiment for SNDK remained ‘extremely bullish.’

Shares of memory chipmakers SanDisk and Western Digital were hammered on Thursday despite posting another set of standout quarterly results that underscored record memory demand. 

Analysts argue the selloff reflects sky-high Wall Street expectations rather than any meaningful deterioration in the underlying businesses. With year-over-year comparisons becoming tougher each quarter, the outlook for memory stocks remains a key debate, and even the slightest hint of slowing growth can send shares tumbling.

SNDK and WDC stocks fell 6.8% and 13%, respectively, on Thursday, their second straight day in the red, although shares edged higher in overnight trading ahead of Friday. MU stock tracked these losses and fell 1.3% on Thursday.

Jefferies’ Caution On NAND Inventory, Slowing Data Center Growth 

Jefferies pushed Wall Street’s biggest price target cuts for SanDisk, cutting the target on the stock to $1,750 from $3,000. Although it maintained a ‘Buy’ rating, the research firm said the “only in-line September [quarter] outlook likely tempers investor enthusiasm in the near-term.”

Jefferies warned that recent inventory accumulation in SanDisk’s edge business, which sells NAND memory for devices such as PCs and smartphones and other systems outside large cloud data centers, could eventually weigh on demand as customers work through existing stock. 

The brokerage expects data centers to remain the company’s primary growth engine, but said overall bit growth, an industry measure of memory chip shipment volumes, is likely to moderate as the market normalizes.

The brokerage also said SanDisk’s lower gross margin guidance suggests that a greater mix of lower-margin long-term supply agreements is offsetting the benefit of firmer NAND pricing. However, it highlighted continued momentum in the company’s “New Business Models” (NBMs), saying SanDisk has expanded the program to eight customers across its data center and edge businesses. 

For Q1 FY27, SanDisk forecast revenue between $10.3 billion and $10.8 billion, lower than the higher-end analyst expectations of $9.4 billion to $12.3 billion. A slew of analysts, including Citi and Wells Fargo, have already lowered their stock targets on SNDK.

Analyst, Retail View On SNDK

Currently, 18 out of 23 analysts rate SNDK ‘Buy’ or higher, four rate it ‘Hold,’ and one rates it ‘Sell,’ per Koyfin. Their average price target of $2,116.64 implies an upside of 68% from the stock’s last close.

On Stocktwits, retail sentiment for SNDK remained ‘extremely bullish,’ unchanged since the start of the week. “$SNDK is another example of beat and raise, yet stock is tanking,” a trader said. 

“Lot is factored and current pe is much higher compared to historical averages. Simple reason - growth is plateauing (not stopping). Add to the woes, after the clearing event last week, less leveraged trades to pump these,” they said, referring to the curbs in South Korea on leveraged memory funds. 

SanDisk’s scheduled to host its investor day event on Sept. 13.

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