S&P Upgrades SanDisk to BBB as AI Memory Demand Drives Cash Flow Past $23B

3-line summary

• S&P Global Ratings upgraded SanDisk (Nasdaq: SNDK) to BBB from BB+, maintaining a stable outlook, citing surging memory chip demand from AI data center buildouts, a debt-free balance sheet, and strong cash generation.
• S&P said fiscal 2026 revenue surged 175%, and projected fiscal 2027 revenue to roughly double with free cash flow exceeding $23 billion. Long-term data center supply contracts, which include volume commitments and price protection clauses, offer higher earnings visibility than traditional PC and mobile markets, the agency said.
• SanDisk repaid all its debt earlier this year and is expected to maintain a net cash position even as capital spending and shareholder returns increase. S&P noted memory markets remain inherently cyclical with risk of sharp price declines, and flagged that competitors' new supply capacity could emerge around 2028.

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