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Written by: Rita
At the Communacopia conference, SanDisk revealed that long-term agreements (NBM) have covered 50% of planned shipment volumes for FY27 and 67% for FY28. Even under a pessimistic scenario of declining NAND prices, the floor prices in these agreements can still support gross margins of about 80%. In a meeting-points report published by Goldman Sachs on September 9, the firm maintained a Buy rating and a 12-month target price of $2,200, implying 26.6% upside versus the current share price of $1,738.
Goldman Sachs believes SanDisk’s core logic is shifting from cyclical competition to structural upgrades. The NAND market is moving from short-term spot pricing to long-term agreements, with data-center demand becoming the main driver. Growth on the supply side is constrained, while demand continues to expand, driven by AI inference. With its joint-venture platform with Kioxia and low capital intensity, SanDisk has stronger earnings visibility in this cycle.
NBM locks in an 80% gross margin
SanDisk’s management explained the financial components of NBM in detail at the conference. The floor-price terms are the key: they ensure that in extreme scenarios where NAND prices fall sharply, the gross margin of most of the company’s business can still be maintained at roughly the 80% level. This protective mechanism changes SanDisk’s earnings structure, making it no longer fully exposed to drastic fluctuations in spot prices.
In terms of coverage, NBM covers 50% of FY27 planned shipment volumes, rising to 67% in FY28. Goldman Sachs believes this coverage implies significantly improved revenue visibility for SanDisk over the next two years. Management’s confidence in long-term financial targets is built on the certainty created by these agreements.
Supply constrained; China’s capacity absorbs itself
SanDisk’s view on the NAND supply side is cautious. Management believes that foreseeable future NAND supply growth will remain sluggish, while the adoption of AI inference is driving continued demand increases. This supply-demand dynamic provides price support.
Regarding capacity expansion by Chinese competitors, SanDisk believes that its incremental supply will be largely absorbed by local markets, limiting the impact on the global market. Goldman Sachs also noted in its report that YMTC’s roadmap iterations are a potential risk, but that its impact is currently considered controllable.
HBF opens up long-term upside
SanDisk management is optimistic about the long-term prospects for HBF and KV Cache. HBF is seen as a potential solution to the AI “memory wall” problem; its higher density can meet both AI compute’s demands for memory bandwidth and capacity. KV Cache is crucial for AI inference. Management previously described it as a key component of the AI data-center memory TAM.
Citing management’s calculations, Goldman Sachs estimates that by 2032, KV Cache will account for about 35% of the 1.2 ZB AI data-center memory TAM. This figure suggests SanDisk has far more long-term growth potential in AI storage than traditional NAND.
Low capital intensity supports bit growth
SanDisk and Kioxia’s joint-venture agreement has been extended to 2034. Management emphasized that this arrangement—combining IP ownership with R&D investment—gives the joint venture efficient manufacturing capabilities, and that the share of bit growth is not proportional to capital expenditures. SanDisk’s capital intensity is about 5%, far below the industry average.
Management also said that through the BiCS platform, the company can see the technical path for the next several years, which can support further bit growth under the same low capital intensity. Goldman Sachs believes this cost advantage is a key differentiating factor that sets SanDisk apart from its peers.
Share repurchases lead capital returns
SanDisk reiterated that stock buybacks are the main way to return excess capital to shareholders. The company has already executed approximately $4.5 billion in repurchases. Management is open to the introduction of dividends in the future, but at this stage buybacks remain the core tool.
Goldman Sachs’ target price of $2,200 is based on a 20x P/E multiple applied to normalized earnings per share of $110. With the current share price at $1,738, this implies 26.6% upside. Goldman Sachs believes that the valuation is supported by, together: the earnings stability brought by NBM, the industry landscape with constrained supply, and low capital intensity.
Downside risks include: the long-term structural change in NAND pricing not materializing; YMTC continuing to iterate its technology roadmap; and SanDisk failing to gain share in the eSSD market.
Disclaimer
This article is a compilation and interpretation by ChaoXiang Research of a third-party brokerage research report (Goldman Sachs, September 9, 2026), combined with publicly available market information. The ratings, target prices, earnings forecasts, and related judgments cited in the text are solely the views of that brokerage’s analysts and only represent the position of its affiliated institution. They do not represent ChaoXiang Research’s views and do not constitute any investment advice.
Market has risks; decisions should be made independently. This article should not be used as a basis to buy or sell any securities.

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