📊 𝐈𝐍𝐕𝐄𝐒𝐓𝐎𝐑 𝐍𝐎𝐓𝐄: Lynx Equity Reiterat

📊 𝐈𝐍𝐕𝐄𝐒𝐓𝐎𝐑 𝐍𝐎𝐓𝐄: Lynx Equity Reiterates Bullish View on $Sandisk(SNDK.US) SanDisk Ahead of Earnings

👉 𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:

➤ 𝗟𝘆𝗻𝘅 𝗘𝗾𝘂𝗶𝘁𝘆 says "𝗟𝗼𝗮𝗱 𝘁𝗵𝗲 𝘁𝗿𝘂𝗰𝗸 𝘂𝗽" on 𝗦𝗮𝗻𝗗𝗶𝘀𝗸.

➤ Firm reiterates $𝟮,𝟰𝟱𝟬 price target on 𝗦𝗮𝗻𝗗𝗶𝘀𝗸.

➤ Analyst expects memory and flash suppliers to capture much of ~$𝟰𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in incremental hyperscaler AI capex.

➤ Amazon's higher AI spending was cited as supporting rising memory costs.

➤ Analyst expects memory and flash 𝗔𝗦𝗣𝘀 to rise through the rest of 𝟮𝟬𝟮𝟲.

➤ Price support for data center 𝗗𝗥𝗔𝗠 and flash is expected through 𝟮𝟬𝟮𝟳.

➤ Lynx expects SanDisk to report a 𝗯𝗲𝗮𝘁-𝗮𝗻𝗱-𝗿𝗮𝗶𝘀𝗲 earnings quarter.

➤ Firm believes AI demand will continue to exceed compute capacity.

➤ Analyst sees 𝗭-𝗡𝗔𝗡𝗗 as a key long-term AI inference technology.

👉 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀:

➤ Reinforces the bullish outlook for 𝗺𝗲𝗺𝗼𝗿𝘆 and 𝗳𝗹𝗮𝘀𝗵 stocks amid AI spending.

➤ Suggests hyperscaler AI investments could sustain pricing power for memory suppliers.

➤ Positive earnings guidance from SanDisk could strengthen sentiment across the AI memory sector.

👉 𝗘𝘅𝗽𝗲𝗿𝘁 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁:

𝗟𝘆𝗻𝘅 𝗘𝗾𝘂𝗶𝘁𝘆:

"Memory and storage names are direct beneficiaries of the ~$40bn in incremental capex at hyperscalers to be spent in the second half of 2026. Ahead of the AMZN print, we had called out the incremental $15bn capex at GOOG was to be applied to higher prices at memory and flash. AMZN confirmed our view. In raising its capex by $20bn, AMZN explicitly called out the incremental capex for paying for higher memory costs. We think this applies to the other hyperscalers too. We think it is safe to say that the bulk of the ~$40bn in incremental capex is headed to memory and flash suppliers. It is an embarrassment of riches, to say the least. With this powerful tailwind chasing limited supply, we think it is safe to say ASPs are to rise sequentially through the rest of 2026. And with hyperscalers indicating higher capex in 2027, we expect price support for data center SKUs of DRAM and Flash thru end of 2027. We expect SNDK management to say supply/demand imbalance is to last through the end of the decade."

"At the ongoing FMS conference, we attended Samsung’s keynote. The focus was on the so-called Z-NAND technology where a flash chip (~2+TB) does the bulk of storage of AI model parameters and DRAM takes a backseat. 2-3 year out, we think this is where AI Inferencing is headed. We think the NAND cycle outlasts the DRAM cycle. We think SNDK offers superior risk/reward to the upside over a multi-year horizon. We would be loading the truck up at current levels."