Analysts are reacting positively to SanDisk (SNDK) after the semiconductor company introduced a new “New Business Model” alongside its strong third-quarter results. More specifically, the firm has signed long-term supply contracts in which customers commit to purchasing a set amount of storage at agreed-upon pricing terms, often with minimum purchase guarantees. Because of this, analysts believe the deals could make SanDisk’s revenue more predictable and less tied to the usual ups and downs of the memory market.
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Forget margin or options. Here's how the pros trade SNDKImportantly, the company has already signed five deals that cover more than one-third of its expected production by Fiscal 2027 and include at least $42 billion in revenue and over $11 billion in guaranteed commitments. Some deals include fixed pricing and volume commitments, while others use “take-or-pay” terms, meaning customers must pay for a minimum amount even if they don’t use it. In addition, shorter contracts tend to have stricter guarantees, while longer ones include price ranges with upper and lower limits.
Because of this setup, firms like Morgan Stanley (MS), Citi (C), and BNP Paribas (BNPQY) believe that the model could reduce volatility and support more stable, long-term growth in what has historically been a very cyclical industry. Even so, not all analysts are fully convinced yet. While several firms raised their price targets and kept positive ratings, others said it may take time to see if these agreements truly stabilize the business. For example, five-star RBC (RY) analyst Srini Pajjuri noted that the stock could still trade based on traditional supply-and-demand cycles until the benefits become clearer.
Is SNDK Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SNDK stock based on 14 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SNDK price target of $1,341 per share implies 23.4% upside potential.
