11:19 AM EDT, 09/23/2025 (MT Newswires) -- Sandisk ( SNDK ) is set to benefit from stronger AI-driven demand in the data center that is tightening the NAND market, with undersupply and cost reductions from nodal transitions supporting margins, BofA Securities said in a Tuesday note.

Margins should be helped by better-than-expected data center demand, increasing content in consumer devices, restrictions on Chinese NAND manufacturing, and limited near-term capacity additions from suppliers, analyst Wamsi Mohan wrote.

The firm also expects Sandisk ( SNDK ) to see further margin improvement from share gains in the hyperscale eSSD market as qualifications complete in 2026.

Cloud revenue is projected to reach about 20% of Sandisk's ( SNDK ) total revenue in 2026, up from 13% in 2025, with average selling prices likely to rise double-digits on AI-driven demand and limited supply.

BofA raised its fiscal 2026 estimates to revenue of $8.9 billion and EPS of $6.93, ahead of the Street's $5.76.

The firm lifted its price target on Sandisk ( SNDK ) to $125 from $59 and reiterated a buy rating.

Shares of Sandisk ( SNDK ) were up 3.5% in recent trading.

Price: 106.55, Change: +3.63, Percent Change: +3.53