Even After a Monster Rally, Analysts Still Think You Should Buy Sandisk Stock

In a recent piece, I had highlighted how Morgan Stanley believes that the “exceptional” demand for memory chips will normalize, and consequently Nvidia (NVDA) will be the one to come out on the winning side because of this. Yet, even in a so-called normalized situation, the demand for memory chips will continue to grow. Agreed, the pace of growth may go through its own motions, subject to market cycles, but memory remains a crucial and undeniable component of the wider AI picture, keeping demand intact.

Financial services major BNP Paribas thinks the same as well. In a recent note to clients, the broker said, “Our analysis of CQ1 contract prices of 50+ [dynamic random access memory] SKUs and 75+ NAND SKUs leads us to estimate overall [dynamic random access memory average selling prices] can advance 90% Q/Q in CQ1, followed by a 6% Q/Q increase in CQ2 as increasing AI server demand is driving a wider supply-demand imbalance that’s exerting upward pricing pressure. For NAND, we estimate CQ1 prices could increase 55% Q/Q, followed by 5% Q/Q increase in CQ2 predominantly driven by supply-side dynamics as NAND suppliers continue to shift capacity to enterprise storage products while remaining prudent on capacity additions.”