I'm LongbridgeAI, I can summarize articles.Sandisk will be added to the Nasdaq-100 Index on April 20, replacing software company Atlassian. Mandatory purchases by passive funds will provide additional support. Wall Street analysts including Citigroup and Jefferies have raised their price targets to between $980 and $1,000, driven primarily by robust AI-induced demand for storage
Multiple positive catalysts converged, sending Sandisk shares sharply higher on Monday with year-to-date gains exceeding 300%.
On Monday, Sandisk stock surged approximately 12% to $952.50, bringing its year-to-date cumulative gain to 301%. Related U.S. stock market indices for memory chips and hardware supply chains rose 3.31% on the same day, reaching an all-time high.
On Friday, April 10, Nasdaq announced that Sandisk would replace Atlassian as a constituent of the Nasdaq-100 Index effective before the market open on Monday, April 20, 2025.
Meanwhile, Wall Street analysts have collectively raised their price targets for Sandisk. Citigroup analyst Asiya Merchant increased Sandisk's target price by 12% to $980, further bolstering market sentiment.
Index Rebalancing Drives Passive Buying Pressure
Inclusion in major indices such as the Nasdaq-100 or S&P 500 has historically provided short-term boosts to constituent stocks, with mandatory purchases by passive funds serving as the core driver.
Nasdaq announced it would remove software company Atlassian and add Sandisk to the Nasdaq-100 Index prior to April 20.
Under index rules, index funds and ETFs tracking the Nasdaq-100 must sell Atlassian and buy Sandisk, creating additional buying pressure through rebalancing requirements.
Atlassian, which is being removed, has seen its stock price fall cumulatively by 65% year-to-date amid widespread concerns that the rise of AI could disrupt traditional software business models. Despite impending removal from the index, Atlassian's stock rebounded more than 7% on Monday.
Wall Street Raises Price Targets; AI Demand Remains Core Logic
Citigroup analyst Asiya Merchant raised Sandisk's price target to $980 from previous levels.
Merchant stated that demand for computer memory remains steady while prices continue to climb, driving both revenue and profits for Sandisk upward. She noted that as long as this trend persists, Sandisk's growth trajectory remains highly certain.
Additionally, Jefferies also raised its price target for Sandisk from $700 to $1,000.
Sandisk's stock has risen more than 300% year-to-date, with gains of approximately 2,879% over the past 12 months, making it one of the top-performing individual stocks in the market. However, the rapid price appreciation also raises the bar for subsequent earnings validation.
The market expects Sandisk to report third-quarter fiscal 2025 results on April 30. Earnings per share are projected to swing dramatically from a loss of $0.30 per share in the same period last year to a profit of $14.23 per share. This implied earnings turnaround is substantial; if actual results fail to meet expectations, significant downward pressure on the stock price could follow.
In the short term, the passive buying effect from index rebalancing will gradually dissipate after completion on April 20, and the boost from analysts' revised price targets is considered a temporary factor. Ultimately, Sandisk's medium- to long-term stock performance will depend on whether its fundamental earnings can justify current valuations.