Jefferies Cuts SanDisk Price Target by 42% Amid Record Earnings

In a surprising move, Jefferies has reduced its price target for SanDisk from $3,000 to $1,750, marking a 42% decrease. This decision comes shortly after the AI chipmaker announced record earnings, with quarterly revenue soaring 372% year-over-year to $8.97 billion, exceeding its own guidance.

SanDisk's non-GAAP gross margin reached an impressive 84.6%, a significant increase from 26.4% in the previous year, and its earnings per share of $39.25 surpassed analyst expectations by over 12%. The company's data center revenue also saw remarkable growth, increasing by 103% in just one quarter to $2.98 billion.

Despite these positive figures, SanDisk's stock has plummeted by 25% over the past month, prompting analysts to adjust their estimates. Notably, Susquehanna cut its estimate by 6%, while Evercore and Citi also made reductions. Jefferies' latest cut is particularly striking given the firm's history of raising its price target multiple times in recent years.

SanDisk's Chairman and CEO, David Goeckeler, highlighted the company's achievements, stating they delivered record revenue, gross margin, and earnings per share, all exceeding their guidance. Furthermore, the board has authorized an additional $14 billion in share buybacks.