Sandisk's NAND Supercycle: Why I'm Calling For A Strong Buy Before Q3 Earnings (Archive)
NAND shortage and AI demand drive prices, margins, and cash flow higher.
This 5-Minute Pitch was originally published on Seeking Alpha. It is shared here to showcase my work and track record. 5-Minute Pitches published only this site will not be disseminated anywhere else and will remain behind a paywall, accessible only to Hunter Tier members.
Elevator Pitch
- Sandisk benefits from a severe NAND shortage and AI-driven demand, which is pushing NAND prices higher and supporting strong revenue and margin growth.
- We can expect sharply higher gross margins in Q3 FY26 due to NAND contract price hikes.
- New multi-year long-term agreements with prepayments can improve revenue visibility while lowering net working capital intensity, thus enhancing cash flow conversion.
- Sandisk trades at a notable 1-year forward EV/EBITDA premium to memory peers, but broad earnings upgrades suggest the market is rightly rewarding its superior growth outlook.
- Sandisk shares are in a strong uptrend with shallow pullbacks, recently breaking out from a tight consolidation range with no clear signs of selling pressure.
Read the full article here.
