JPMorgan Cautions on SanDisk’s (SNDK) Long-Term Profitability Despite AI-Driven SSD Supercycle

Sandisk Corporation (NASDAQ:SNDK) is 1 of the best performing S&P 500 stocks successful 2025. On December 8, JPMorgan initiated sum of SanDisk with a Neutral standing and $235 terms target. The steadfast noted that SanDisk is well-positioned to capitalize connected the AI-driven endeavor SSD supercycle, benefiting from a low-cost operation done its associated task with Kioxia. However, JPMorgan cautioned that the company’s existent pricing spot is apt a impermanent cyclical highest alternatively than a imperishable displacement successful the industry’s nett margins.

In its FQ1 2026 net report, SanDisk Corporation reported a gross of $2.3 billion, which was a 21% sequential summation and a 23% year-over-year increase. Non-GAAP EPS surged to $1.22, which besides exceeded the $0.29 recorded successful the erstwhile quarter. This was supported by a non-GAAP gross borderline of 29.9%, which grew by 3.5% quarter-over-quarter arsenic the institution transitioned to its high-performance BiCS8 technology, which already accounts for 15% of full bits shipped.

Data Center gross peculiarly roseate 26% sequentially to $269 million, driven by unreality enlargement and AI infrastructure needs. The Edge segment, which includes mobile and lawsuit storage, besides climbed 26% to scope $1.387 billion, portion Consumer gross grew 11% to $652 million. Looking up to FQ2 2026, SanDisk projects gross betwixt $2.55 and $2.65 billion. Management highlighted that visibility into 2026 and 2027 is improving arsenic customers displacement toward semipermanent agreements to guarantee proviso certainty, peculiarly for endeavor SSDs similar the Stargate portfolio.

Sandisk Corporation (NASDAQ:SNDK) develops, manufactures, and sells information retention devices and solutions utilizing NAND flash exertion successful the US, Europe, the Middle East, Africa, Asia, and internationally.

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Disclosure: None. This nonfiction is primitively published at Insider Monkey.