Key Takeaways:
Sandisk shares rose 5% to $1,836 Monday as three Wall Street firms turned bullish on memory after a 14% selloff.
"The pullback was likely temporary," UBS analyst Nicolas Gaudois said, citing DRAM undersupply until at least 2Q28.
UBS lifted its DDR contract-pricing forecast to 32% quarter over quarter in Q3 2026 from 17%, and to 18% in Q4 from 12%. Bank of America's Vivek Arya reiterated a Buy on Micron Technology with a $1,550 price target, calling Thursday's move "a healthy reset, not a structural change in AI demand." Citi added Micron to its 90-day upside catalyst watch, raising average selling price estimates on stronger AI demand.
The selloff Thursday followed a report that AI startup Anthropic was in preliminary talks with Samsung to design custom AI chips, which traders interpreted as a potential threat to US memory makers. The iShares Semiconductor ETF fell 5.6% that day, with Western Digital dropping 10% and Micron sliding 5.5%. Friday's market holiday gave buyers their first chance to respond to the analyst notes.
Sandisk is the best-performing stock in the S&P 500 this year, up 635% year to date. Micron has gained 240%. BofA's Arya noted that memory now accounts for 35% to 40% of cloud AI capital expenditure, yet memory stocks trade at 10 times forward earnings.
The technical picture, however, has deteriorated. Sandisk formed a bearish divergence on its daily chart and entered a Wyckoff distribution phase, a pattern that often precedes extended declines. The stock closed at its lowest since June 11 after Thursday's rout.
The rebound faces its next test when Samsung reports earnings Tuesday, which could validate or undermine the bullish pricing thesis. For Sandisk holders, the analyst upgrades provide a near-term floor, but the technical setup suggests the path higher may be uneven.
This article is for informational purposes only and does not constitute investment advice.
