Sandisk: The Market Is Dead Wrong (Rating Upgrade)

Yiannis Zourmpanos15.16K FollowersFollow5ShareSavePlay(10min)CommentsSummarySandisk stock fell ~7% after Google TurboQuant, but compression applies only to KV cache, not total storage demand.Data center growth accelerated from 29% to 64% sequentially, driven by adoption of 8TB and 16TB PCIe Gen 5 SSDs.SanDisk allocates 75% of OpEx to R&D, enabling BiCS8 architecture and targeting High-Bandwidth Flash production by 2026.Multi-year supply agreements (1-5 years) reduce pricing volatility and stabilize revenues versus legacy NAND spot market cycles.Forward EPS growth estimated at 223%, with $1.63B operating cash flow and $10.4 cash per share versus 2.42 sector median. Sharamand/iStock via Getty Images Investment Thesis The drop in Sandisk (SNDK) since my last coverage appears to be an overreaction to Google’s TurboQuant. The market is obsessed with "6x compression" but is not realizing this is only for KV cache, not total storage, and making inference cheaperThis article was written byYiannis Zourmpanos15.16K FollowersFollowHi, I'm Yiannis. Spotting winners before they break out is what I do best.Experience: Previously worked at Deloitte and KPMG in external/internal auditing and consulting. Education: Chartered Certified Accountant, Fellow Member of ACCA Global, with BSc and MSc degrees from U.K. business schools. Investment Style: Spotting high-potential winners before they break out, focusing on asymmetric opportunities (with at least upside potential of 3-5X outweighing the downside risk). By leveraging market inefficiencies and contrarian insights, we seek to maximize long-term compounding while protecting against capital impairment.Risk management is paramount—we seek a strong margin of safety to protect against capital impairment while maximizing long-term compounding. Our 2-3 year investment horizon allows us to ride out volatility, ensuring that patience, discipline, and intelligent capital allocation drive outsized returns over time.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in SNDK over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.