After Visa's Earnings Report, Stock Price Pullback, Argus Research Upgrades Rating to 'Buy'

August 10th, NAND flash memory chip manufacturer SanDisk recently experienced a stock price pullback after its financial report guidance fell below expectations. However, institutions believe that AI-driven storage demand will continue to support the company's long-term growth.

Argus Research analyst Jim Kelleher recently upgraded SanDisk from "Hold" to "Buy" and set a 12-month price target of $1600. He stated that when the team initiated coverage in July, they were waiting for a better buying opportunity, and the current stock price has significantly retraced from its peak, presenting an investment window.

After hitting a historical high of $2335 on June 25th, SanDisk's stock price has been declining, currently down about 47% from the peak. Last week, after the company announced its quarterly performance and provided future guidance below market expectations, the stock price dropped by 6.8% in a single day and then continued to decline by 3.7%.

However, Kelleher believes that SanDisk is in the early stages of a multi-year revenue growth acceleration and profit margin expansion cycle. With AI data center construction driving a surge in storage demand and major cloud computing companies such as Amazon, Meta, and Google's parent company Alphabet continuing to invest hundreds of billions of dollars in infrastructure, the storage component supply-demand gap is widening.

He predicts that due to the company's revenue growth significantly outpacing cost growth, there is still room for further margin improvement in the future.

So far, SanDisk's stock price has risen by about 422% this year, with a 2757% increase over the past 12 months. Despite a recent significant pullback, institutions believe that the AI infrastructure investment cycle may provide new growth momentum.