Do not fear the sharp drop in stock prices! Bank of America is bullish on SanDisk (SNDK.US) and sees the opportunity in the shortage of storage chips.

On Thursday, Sandisk (SNDK.US) stock price plummeted more than 20% due to the overall market volatility. However, Bank of America Corp stated that after holding an investor meeting with Sandisk's CEO David Goeckler and CFO Luis Visoso, the bank's bullish stance on this storage chip manufacturer was further strengthened. Analyst Wamsi Mohan wrote in a report to clients, "The following factors make us more confident in our bullish sentiment towards the stock: it is expected that the NAND flash memory market will continue to suffer supply shortages at least until the end of 2026; strong growth in demand from data centers and artificial intelligence (AI); low inventory levels in the NAND industry; Sandisk is expanding production capacity for enterprise solid-state drives (eSSD), aiming to increase market share; the company is transitioning to the BiCS8 process node; and customer demand visibility is continuously improving." Mohan reiterated his "buy" rating and raised the target price from $270 to $300. Mohan further noted that although there is currently a shortage of storage chips, Sandisk currently has no plans to expand its production capacity. "Sandisk typically receives annual demand forecasts from customers, and currently customers are eager to secure their supply volumes," Mohan added. "Management has begun negotiations on long-term contract supply volumes and pricing structures. CEO David Goeckler, who previously served as CEO of Western Digital Corporation (WDC.US), successfully optimized product pricing; he now plans to improve the return on investment in the NAND industry through prudent capacity planning. Management is closely monitoring potential risks of excess ordering by comparing historical order patterns."