Sandisk Stock Split: The Price-Target Trap to Avoid

Sandisk’s $2,200 target

0:00 Sandisk stock, ticker symbol SNDK, closed at $1,151 on October 30th, and Cantor Fitzgerald still has a $2,200 price target on it. That's almost double on paper, except Cantor had just cut that target from $2900 a few days earlier. And the stock fell $179 a share on Friday alone, the day after the biggest quarter Sandisk has ever reported. So, if you're bullish, that gap looks like a gift. If you're not, Friday looked a lot like the first crack in the memory boom.

0:28 Here's what actually happened. On Friday morning, Kioxia, the Japanese company that runs Sandisk flash factories with it, said its flash prices rose in the mid-20% range last quarter, after jumping 70% the quarter before. My name is Blake. I dig up stocks before the bull stampedes, so you’re not buying at the top like Wojak. And today on 9to5investing we're talking about Sandisk stock, whether that $2,200 target still holds up and the stock split trap that starts on November 20th.

0:54 But first, Friday, think about it like your house. If your house went up 70% last year, and only went up in the mid 20s this year, you're still richer than you've ever been. But if you just bought it because you figured, it'd go up another 70%, you had a really bad Friday. That's basically Sandisk's stock right now. Nothing broke, it just stopped speeding up. And in two trading days, the stock gave back about 18%.

The 8-for-1 stock split trap

1:15 Let's start with the stock split, because it's the part that's going to trip up the most people. A stock split is like asking the pizza place to cut your pizza into 8 slices instead of handing it to you whole. You've got more slices and exactly the same amount of pizza. So, on November 19th, Sandisk is doing an 8 for 1 stock split, which basically just means every share you own turns into 8 shares, and each new share is worth the old price divided by 8.

1:37 So if the price stayed exactly where it closed on Friday, $1,151 a share would become $144 a share. And nobody got any richer. But here's the trap. After the split, Cantor's $2,200 price target really means $275. But some websites, old headlines and old videos, may keep showing the $2,200 right next to $144 stock. Put those two numbers side by side and it looks like more than a 1400% upside. Zoomer is already reaching for it. Wojak is going to see that number and back up the truck.

2:08 It's the same pizza, Wojak. So why do companies even bother to do this? Sandisk says the split is to make the stock easier to buy, including for its own employees through their stock purchase plan. To be fair, splits do get people excited. But a split doesn't mean the company is worth a single dollar more. It just changes how many pieces the same company is cut into. I will also say though, I have seen many instances where a stock split causes a stock to rally just because more people are buying it.

2:32 So technically a stock split, even though it doesn't inherently increase the value, it can actually increase that market value because more people are buying pushing up the price. If you already own Sandisk stock, you don't have to do anything. The new shares get dropped into your account after the close on November 19th, and the stock starts trading at the new lower price on Friday, November 20th. So for the rest of this video, I'm going to use the pre-split numbers.

2:55 Because that's what Sandisk and every analyst are still reporting. If you're watching after the split, just divide any per share number I say by 8.

What Sandisk actually sells

3:01 But to know if $1,151 is cheap or expensive, you have to know what Sandisk actually sells. If you've ever owned a digital camera, you probably think of the little memory card. That's still part of it, but now it's the smallest part of the business. Sandisk makes NAND flash, which basically just means memory that remembers your stuff even when the power is off. It's the storage in your phone, the drive in your laptop, and more and more, the giant drives inside of AI data centers.

3:26 Now this is not the same thing as the high bandwidth memory you hear about with NVIDIA chips. If that memory is the stuff sitting on your desk while you are at work, Flash is the filing cabinet where everything gets kept. So AI needs a lot of filing cabinets. Sandisk's data center sales went from 269 million a year ago to 4.8 billion last quarter, which is nearly 18 times bigger. But data centers aren't the whole story. The other big piece is what Sandisk calls edge, which is flash for phones and PCs.

3:49 And that went from about 1.4 billion to 5.8 billion. The memory card business is the only part that shrank. Sandisk CEO David Goeckeler, told CNBC in August that Sandisk has seen an explosion in the market around inference, which is the part where AI actually answers your questions. That's the filing cabinet getting opened over and over again all day. What makes this even stranger is that a couple of years ago, you couldn't even buy this business on its own.

From SunDisk to the Western Digital spin-off

4:14 Sandisk was founded in 1988, and one of its co-founders, Sanjay Mehrotra, later went on to run Micron, which is now one of its biggest competitors. Then in 2016, Western Digital bought Sandisk for about $16 billion and stapled it to a hard drive company for almost nine years. That ended on February 24, 2025, when Western Digital spun Sandisk back out as its own stock. By the end of that year, it was the top performing stock in the S&P 500, with a small asterisk because it only joined the index in November.

4:45 Spin-offs get ignored all the time, but this one did not stay ignored for long. Chad says he bought it back when it was a boring spin-off, and the trad wife has heard about it every night since. So how does a forgotten spin-off turn into one of the hottest stocks in the market? It mostly comes down to price.

Record earnings and the memory cycle

4:59 A year ago, in the quarter that ended in October 2025, Sandisk did a little over $2 billion in revenue with a gross margin that was nothing special. This quarter it did 11 billion in revenue, almost five times as much, with an 85% gross margin. I'm a CPA who looks at stocks a lot, so I can tell you that 85% is a software margin, not a factory margin. So what happened? Supply and demand, baby. AI data centers started buying storage in huge amounts.

5:24 The memory makers hadn't built enough factories. And when everybody wants something there isn't enough of, the price goes up. Bank of America estimated about 60% of this quarter's growth came from selling more, and about 40% came from charging more. But that's also the part that makes memory stocks dangerous, because this industry runs in cycles. Think about what happens in a boom town when home prices jump. Every builder in the state shows up. They all start building at once and a couple of years later, there are for-sale signs on every street.

5:49 Memory works the same way. When prices are high, everybody builds more factories. The new supply all shows up around the same time, prices fall and the stocks fall even harder. Sandisk’s own CEO, said it pretty bluntly back in May. He called that cycle really corrosive to our business.

Can long-term contracts protect the boom?

6:04 Its fix is long-term contracts. Sandisk has signed multi-year deals with big customers, some lasting up to five years, and back in May, it said they had already covered a big chunk of this fiscal year shipments and could get past half. Some of those customers even put up collateral, which basically just means they posted guarantees worth billions of dollars that pay Sandisk if they don't buy what they promised. But here's the catch. The longer contracts lean more on floating prices, which means if flash prices fall, a lot of what Sandisk gets paid can fall with them.

6:30 A contract can lock in the customer, but it cannot always lock in the price.

Kioxia’s warning and analyst target cuts

6:34 So that's why Friday mattered so much. Kioxia and Sandisk run their flash factories in Japan together, and they just extended that partnership for years. So when Kioxia says price increases are slowing, it's basically Sandisk's roommate telling you the rent isn't going up as fast anymore. The trad wife already read the note on the fridge. Kioxia also guided to an operating profit below what analysts expected, which Bloomberg said implies price increases close to flat this quarter.

6:57 Meanwhile, Sandisk's own outlook was actually good. It guided to 12.2 to 12.6 billion revenue next quarter and 55 to 57 dollars a share in adjusted earnings, both a little above what analysts were expecting. But for a stock that ran this far, good was not good enough. So the analysts mostly kept their buy ratings but trimmed their targets. Goldman Sachs went from $2,200 to $2,000. Bank of America went from $2,500 to $2,000, and Wells Fargo, which isn't bullish, cut from $1,550 to $1,300.

7:29 Across 25 analysts, the average target is about 2.1k. The lowest is 1k and the highest is 3.6k. So Cantor’s 2.2k sits a little above the middle and it was set before anyone saw this quarter. My take, price targets tend to chase the price, not lead it.

Is Sandisk really cheap?

7:44 So, is Sandisk cheap at $1,151 a share? On the surface, it looks ridiculously cheap. If you take last quarter’s $49.51 in adjusted earnings per share and multiply it by 4, you get about $198 a year, which puts the stock at less than 6 times earnings. Use next quarter's guidance instead, and it's closer to five times. Doomer has seen this movie before. Because here's the problem with memory stocks. They tend to look cheapest right near the top. It's like pricing your house off the one month when every buyer in the town was in a bidding war.

8:13 The number's real, it just isn't normal. So the real question isn't what Sandisk earns right now. It's what it earns in normal year after the boom cools off. So let's stress test it with Sandisk’s own numbers. Say earnings fall to half of this quarter's pace, about $99 a share, for a year, and say the market pays 12 times that. Which is my assumption not a forecast. So what would that be worth? about $1,188, almost exactly where the stock closed on Friday.

8:40 In other words, Friday's price already assumes that the boom will cool off. but a real bust can be worse than half. In fiscal 2025, right before this boom, Sandisk reported a net loss of about 1.6 billion, driven by a 1.8 billion goodwill write-down.

The bull case and the bear case

8:55 So let's give both sides a fair shot. Positive Pete's case is simple. AI keeps needing more storage, Sandisk keeps winning data center deals, and Goldman Sachs says Flash is seeing very limited supply additions for the foreseeable future. That cash is why Sandisk can afford to shrink its share count. It spent $5 billion buying back its own stock last quarter, and over the last two quarters, it bought back about 4% of all its shares. But negative Nelly's case is just as simple.

9:18 Memory has always been a cycle. The first warning just came from Sandisk's own factory partner, and Morningstar's analysts warned back in May that this pricing up cycle is finite. which is why she'd flagged that the CEO sold more than $50 million of stock in September under a preset trading plan. That's common for executives and does not mean that he's bearish necessarily, but it's worth knowing about. That matters because the stock moves fast. Marketbeat lists its beta at a little over five, which basically means when the market sneezes, Sandisk catches the flu.

9:46 So even after a record quarter, it's now more than half below it's all time high. Wojak bought somewhere up there and he's handling it really well. Pete and Nelly could both be right just at different times.

What I would watch next

9:56 So here is how I would think about it and to be clear, I don't own Sandisk at the time of recording this video. First, use the right numbers. After November 20th divide every old target by 8, so 2.2k becomes $275. And the average target becomes a little over $260. Next, watch flash prices, not headlines. The thing that moves this stock most isn't the split or a target. It's whether NAND prices keep rising, so the next reports from Kioxia and Sandisk matter more than any analyst note.

10:22 Last, size it like a cyclical stock. If you buy, an amount you could watch get cut in half without panic selling. Because this stock just showed you, it can do that. So here's what would change my mind either way. If flash prices start actually falling, not just rising slower, that's the bust signal. If they keep rising and those contracts hold, Friday's drop starts to look like a gift. Sandisk is a great business in a boom, priced like the boom is cooling off and the split doesn't change any of that.

10:47 It's the same pizza, just more slices. Let me know what you think in the comments, do you believe that this memory boom will make it through 2027? This split won't make you richer, but this video that YouTube picked for you just might.