Prediction: This will be SanDisk's stock price by mid-2027 (hint: it implies a big move)

Memory chip maker Sandisk (NASDAQ: SNDK) was the best-performing stock in the S&P 500 (SNPINDEX: ^GSPC) in 2025, and it's currently leading the index higher in 2026. The stock has advanced 570% year to date amid a severe memory chip supply shortage fueled by the artificial intelligence infrastructure build-out.

In general, analysts think Sandisk remains undervalued. Wall Street's median target price of $2,500 per share implies 57% upside from its current share price of $1,590. But I think the stock will increase 91% to $3,040 per share by August 2027 (i.e., when the company reports financial results for the full fiscal year).

Here's my logic.

Sandisk is capitalizing on AI-driven demand for NAND flash memory

Sandisk develops storage solutions based on NAND flash memory. Once a sleepy consumer brand, it has shifted focus to enterprise solid-state drives (SSDs), which play an important role in supporting artificial intelligence workloads. Specifically, NAND-based SSDs provide storage for active AI training data and models before they are loaded into DRAM (working memory).

"NAND flash is emerging as the only economically viable solution to deliver the capacity, performance, and efficiency required to keep models accessible for real-time inference at scale," according to CEO David Goeckeler. Sandisk is capitalizing on that opportunity by expanding its enterprise SSD portfolio. Products based on Stargate, a new controller built to improve enterprise SSD storage density, will begin shipping this quarter.

Meanwhile, Sandisk in July started sampling chips built on BiCS10 architecture, the 10th generation of its 3D NAND flash memory technology. Compared to the previous generation, BiCS10 increases bit density by 59%, meaning more data can be store in the same physical space. Also, memory chips built on the new architecture are 33% faster and much more power efficient than chips built on the previous BiCS8 architecture.

Wall Street expects Sandisk's revenue to grow 155% in fiscal 2027

Sandisk reported impressive financial results for the third quarter of fiscal 2026 (ended in March). Revenue rose 251% to $5.9 billion, driven by especially strong sales growth in the data center segment. And non-GAAP earnings increased to $23.41 per diluted share, up from a loss of $0.30 per diluted share in the previous year.

Sandisk will likely keep posting strong numbers for the foreseeable future. But memory chips sales have historically been highly cyclical because manufacturers tend to overproduce during periods of robust demand. That creates supply gluts that ultimately drive prices lower. For instance, demand for memory chips soared during the pandemic, but DRAM and NAND prices had dropped about 70% by 2023.

Naturally, investors are concerned that history will repeat itself. Those fears are warranted, at least to some degree. Several memory chip manufacturers are constructing new plants to increase production capacity, and some of that new supply will hit the market in 2027 and 2028. On the other hand, demand is so intense today that memory chip manufacturers have secured multiyear contracts.

As of April, Sandisk had signed five long-term agreements. "These partnerships support durable, structurally higher earnings and a significantly more predictable and less cyclical business for Sandisk," said CEO David Goeckeler. "We believe this marks a fundamental evolution of our business centered on deeper customer alignment, enhanced visibility, and long-term value creation."

Nevertheless, concerns about a sharp decline in memory prices will likely linger, putting downward pressure on Sandisk's valuation over the next year. The stock currently trades at 18 times sales, but I will assume that metric falls to 9 times sales after Sandisk reports financial results for fiscal 2027 next August.

The Wall Street consensus says revenue will increase about 155% to $50 billion in fiscal 2027. If that forecast is accurate and shares trade at 9 times sales, Sandisk's market value would reach $450 billion. That implies 91% upside from its current market value of $235 billion. It also implies a stock price of $3,040 per share.

Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.