Sandisk rides pricing power surge but faces valuation headwinds. The memory chip maker is experiencing extraordinary margin expansion driven by strong AI demand and tight supply, with Q3 FY2026 expected to deliver steep EBITDA gains. However, the analyst warns that future earnings growth will likely plateau as pricing power moderates and multi-year contracts stabilize revenues. With only incremental volume gains expected, Sandisk's upside appears limited. Trading at approximately 13.5x forward EV/EBITDA near peak memory cycle valuations, the stock leaves little room for multiple expansion. The analyst maintains a Hold rating, citing diminished risk-reward asymmetry as current valuations already reflect AI-driven demand and reduced cyclicality. Investors should recognize that exceptional pricing cycles eventually normalize.
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