On the June 1, 2026, episode of The Morning Filter podcast, Morningstar Chief US Market Strategist Dave Sekera unpacks Morningstar’s thesis on Sandisk SNDK after another stellar quarterly report. The stock has skyrocketed during the past 12 months. Shares of Sandisk trade well above our USD 1,000 fair value estimate. Here’s an excerpt from the episode.
Susan Dziubinski: Sandisk is your next sell, so tell us about it.
David Sekera: Sandisk, of course, is one of the five largest suppliers of NAND flash memory. We know there’s a huge shortage of memory chips available. Insatiable demand from the AI buildout boom for memory right now. Again, one of these companies can charge whatever they want for the product. People are going to pay it, so you see a huge increase in revenue. You’re also seeing a huge increase in operating margins at this point in time. Again, in my mind, I still think it’s more of a commodity-oriented product. At some point, supply is going to catch up, and when that happens, look out below. It’s a 2-star-rated stock at a 70% premium. We rate the company with no economic moat because we think it is a commodity-oriented product, Very High Uncertainty. It’s just phenomenal what this stock has done over the past 52 weeks. It’s gone from USD 40 a share to USD 1,600 a share.
Dziubinski: Morningstar thinks Sandisk stock is worth USD 1,000 per share. What are the assumptions underpinning that? What would you have to believe to justify the stock’s current price?
Sekera: All right. Running through the numbers here again to get to our USD 1,000 fair value. The average revenue over the past three years was USD 6.7 billion. We’re modeling that to triple here in 2026 to USD 19.7 billion. We’re looking for USD 46 billion in 2027. That’s over 6 times higher than what they did for revenue in 2025. Now, we are expecting that revenue here peaks in 2028 at slightly over USD 46 billion, and as we expect more memory chips to be manufactured and come online, maybe some technological change in AI that they don’t demand quite as much memory. We start looking for revenue to start coming down thereafter, but we’re still modeling almost USD 25 billion in 2030. For earnings, we’re looking for … I’m sorry, they posted USD 2.99 in 2025. Now, comparatively, they actually had negative earnings in 2023 and 2024. Want to guess what earnings in 2026 are going to be?
Dziubinski: No idea, Dave. What?
Sekera: USD 72.22.
Dziubinski: Wow.
Sekera: That’s compared to essentially USD 3 last year. In 2027, we’re modeling in USD 203 in earnings and then starting to come down in 2028 as the markets peak, and margins start to compress. We’re still looking for USD 194 in 2028. By 2030, we’re expecting that to come down to USD 65.88, which means that it’s trading at a 25 times our 2030 multiple. To get to the market price, I think what you really have to assume, and it’s not just this company, it’s all of these commodity-oriented tech hardware. You have to assume that AI has driven a permanent shift in demand for their products, with essentially no corresponding increase in supply or reduction in pricing and margins, really no change in AI technology that would require less memory. Again, even though we expect things to tail off in 2029 and 2030, by then 2031, that sets a new baseline to continue to keep growing thereafter as opposed to continuing to come down thereafter.
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