闪迪：NAND供应持续紧张，ASP预期上调，数据中心与AI推理需求支撑长期景气

NAND supply remains tight, raising ASPestimates; PO to $1,080 Reiterate Rating:BUY| PO:1,080.00 USD| Price:919.47 USD Mix shift to data centers; AI inference demand sustainableNAND pricing is up massively.A key question we get from investors is whether higher pricing is sustainable. Or, are we in a typical memory cycle and have margins peaked?We see a longer cycle this time given: 1) mix shift to data centers which inherently is aless cyclical end market vs. client/consumer, 2) NAND demand from AI inferencing whichwe view as sustainable in the medium-term, and 3) NAND suppliers being rational andadding supply judiciously. Cloud/datacenter revenue for SNDK has grown from 1% ofthe mix in F1Q24 to about 15% in F2Q26 (Dec qtr, Figure 1) and we see further mixshift to that end market. PO moves to $1080 (from $900) on approximately 10x(unchanged) C27E EPS of $111.32 (prior $90.21). Reit Buy on secular opportunity as AIinference makes NAND more indispensable. Expecting a beat and raise quarteron pricing strengthSNDK reports F3Q26 after market close on Thur, April 30th. We model F3Q rev/EPS above Street and above guidance. We model rev/EPS of $4.89bn/$14.61 vs. Street$4.69bn/$14.60 and guidance ranges (rev: $4.4-4.8bn, EPS $12-14). For F4Q, we modelrev/EPS of $6.67bn/$22.84 vs. Street $6.34bn/$22.47. We expect SNDK to guide F4Qrevenue in the range of $6.4-6.8bn, and EPS $21-23. We now model NAND ASPsequential growth of 70%/30%/13% for F3Q26/F4Q26/F1Q27 vs. prior 63%/20%/10%. Long-term contracts can reduce the peaks and troughsSNDK is in the process of setting up long-term contracts (both volume and price based) which not only drive better visibility but will help to maintain margins through-cycle. Wemodel GM growing from 51% in F2Q25 to 78.5% in F4Q28 (Figure 2). Given thedynamic nature of the NAND pricing market, we expect these long-term contracts wouldinclude a portion that is fixed and another that is variable. SNDK is offering these longterm agreements to customers across Cloud, Client and Consumer but we expect thelargest uptake to be in the data center business. What can break the NAND cycle? AI efficiency/compression improvements, like TurboQuant, can reduce the amount ofmemory required. We see 1) increased penetration of AI inference in enterprises whichcan drive the overall demand for NAND higher, and 2) improved ROI of hyperscale capexusing these compression techniques, which can actually cause demand for NAND to rise. Valuation (Jun) iQprofileSMSandisk Corporation Company SectorIT Hardware Company Description Sandisk (SNDK) is is aleading developer, manufacturer andprovider of data storage devices and solutions based onNAND flash technology. SNDK has a growing solid statedrive and storage systems portfolio, and is currently thethird largest enterprise SSD manufacturer. Investment Rationale We rate SNDK Buy. We expect long-term growth in demandfor data storage using NAND, mainly driven by generative AI& eSSD share gains / demand in the data center. Stock Data Average Daily Volume18,070,880 Charts BofA vs. Street estimates Abbreviations RAG: Retrieval-Augmented GenerationKV: Key-ValueAI: Artificial IntelligenceNAND: Not And, a type of flash memoryEB: ExabytesHBM: High Bandwidth MemoryDRAM: Dynamic Random Access MemorySSD: Solid State DrivesROI: Return-on-InvestmentASP: Average Sell Price Price objective basis & risk Sandisk Corporation (SNDK) Our PO of $1080 is based on approximately 10x C27E EPS of $111.32 which is in linewith SNDK's global memory peers' average due to similar profitability. Upside risks: 1) we are earlier than expected in the NAND upcycle, 2) stronger thanexpected expansion in the NAND market on sales of AI enabled consumer products, 3)faster than expected eSSD market share gains, and 4) faster than expected recovery inNAND pricing. Downside risks: 1) sharp drop in NAND prices due to oversupply, 2) Competition and overexpansion from Chinese suppliers such as YMTC, 3) slower than expected adoption of AIenabled consumer products, and 4) share loss in eSSD market. Analyst Certification I, Wamsi Mohan, hereby certify that the views expressed in this research reportaccurately reflect my personal views about the subject securities and issuers. I alsocertify that no part of my compensation was, is, or will be, directly or indirectly, relatedto the specific recommendations or view expressed in this research report. iQmethodSMMeasures Definitions Total Assets−Current Liabilities + ST Debt + Accumulated GoodwillAmortizationShareholders’ EquitySalesN/AN/A Denominator Net IncomeDepreciationPre-Tax IncomeTotal EquityInterest Expense Cash Flow From OperationsCapexTax ChargeNet Debt = Total Debt−Cash & EquivalentsEBIT Cash Realization RatioAsset Replacement RatioTax RateNet Debt-To-Equity RatioInterest Cover Denominator Numerator Valuation Toolkit Current Share PriceCurrent Share PriceAnnualised Declared Cash DividendCash Flow From Operations−Total CapexEV = Curr