SUCCESS

I remember my nephew asking me how his uncle’s phone “just knows” what he wants to type next. I tried to explain prediction models and training data in the simplest language. 

After a few thoughts and comments, Ryan came up with another one. He looked at me and asked, “Where does it remember everything?”

The answer is NAND flash storage. And the company that has become the world’s most important supplier of that storage for AI systems is SanDisk (SNDK).

If you didn’t know, SanDisk is the best-performing stock in the S&P 500 this year, up 599.49% year-to-date and 1,270% over the past year, according to Yahoo Finance.

On Oct. 5, Mizuho analyst Vijay Rakesh raised his SanDisk price target to $2,050 from $1,875 and reiterated a Buy rating in a note shared with TheStreet. Rakesh ranks 10th among 12,519 analysts on TipRanks with a 68% success rate and an average return per rating of 74.50%.

His verdict? Agentic AI is creating a storage-demand cycle that the market hasn’t fully priced.

Also Read: SanDisk Corp Latest News and Stories

The agentic AI shift and why storage demand is accelerating again

For three years, the dominant AI storage narrative was about training. That is massive datasets, enormous model weights, petabytes of content that had to be ingested, processed, and stored before a model could be deployed.

Agentic AI changes the demand profile in a specific way. Meta’s Muse, released Sep. 8, and OpenAI’s Dots, unveiled at DevDay on Sep. 29, are persistent systems that run autonomously, managing workflows, scheduling, and executing multi-step tasks, even when you close the app.

Muse reportedly surpassed 5 million users in just 22 days, faster than ChatGPT’s early adoption, according to a Forbes report. Dots is being positioned as an enterprise counterpart — essentially, an agent that works continuously on behalf of professionals.

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Every user interaction these agents process creates data that must be stored, retrieved, and kept within low-latency reach for the next inference call. The technical term is KV-cache: the key-value pairs that allow an AI agent to maintain context across long, complex tasks. 

Rakesh specifically highlighted “solid inference and KV-cache demand” as durable drivers for SanDisk’s storage products.

He expects AI workloads to drive 22% of NAND demand by 2030. The agentic CPU total addressable market alone is projected to reach $80 billion by 2030, growing at a 123% compound annual growth rate over four years. 

Every agentic workload running on a server CPU also creates storage demands that grow as the workloads scale.

The SanDisk numbers make the bull case stronger

If Rakesh’s thesis sounds like forward-looking speculation, SanDisk’s fiscal year 2026 results show it is already playing out.

Fiscal Q4 2026 revenue was $8.97 billion, up 51% sequentially and 372% year over year

Full-year revenue was $20.25 billion, up 175% YoY

Adjusted EPS hit $39.25

Gross margin expanded from 26.4% to a remarkable 84.6%

Data center revenue doubled sequentially to $2.98 billion in Q4 alone, representing 437% growth for the full fiscal year.Source: SanDisk’s Fiscal Year 2026 Earnings.

For Q1 fiscal 2027, SanDisk guided revenue of $10.30-$10.80 billion, with non-GAAP diluted EPS of $44.00-$46.00. Those numbers are delivered; it would represent another sequential step-up.

Rosenblatt analyst Kevin Cassidy added his own conviction separately, assigning a Buy rating with a $2,400 price target, as TheStreet previously reported. He argues that new AI computing platforms are turning NAND into a “system-critical component of AI infrastructure.” 

His statements — “favorable bit-cost curve” — refer to SanDisk’s technology trajectory, where improving density reduces cost per bit even as demand rises, making the business economics structurally better, not just cyclically stronger.

SanDisk has become the world’s most important supplier of storage for AI systems.NoDerog / Getty Images

Where SanDisk fits in the AI stack, and what HBF could mean

Understanding where SanDisk sits helps explain why both Rakesh and Cassidy, among other analysts, are confident the demand is durable rather than a one-time surge.

Nvidia and AMD GPUs provide computing power. SanDisk provides the flash storage that keeps model weights, datasets, and user context within immediate reach. 

SanDisk is also developing High Bandwidth Flash technology targeting read bandwidth comparable to High Bandwidth Memory with eight to sixteen times the capacity, though commercial validation is still ahead.

At $2,050 and $2,400 from two separate analyst teams, both targets imply meaningful upside from current levels even after the 599% year-to-date run. The storage layer of the AI stack has been underappreciated for most of the AI investment boom. Agentic AI running at scale is changing that.

Ryan’s uncle’s phone predicting what he wants to type offers a consumer-level glimpse of what millions of enterprise AI agents could soon be doing simultaneously. SanDisk is where that memory lives.

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New England Patriots quarterback Drake Maye told a New England radio station he was “a little bit skeptical” the U.S. successfully landed astronauts on the moon.

Musk and Jensen Huang, who’s also being honored, were two of the six tech moguls who signed the voluntary “White House Accord on Super Intelligence” last month.

I love a good bargain, and for decades, I’ve made TJMaxx and Marshalls two of my must-stop shops whenever I’m looking to buy new clothes.

Often, they don’t have the right size and fit for my pants, but I invariably find at least one or two name-brand shirts or sweaters, and for my money, there’s no better place to get socks and t-shirts.

I’m clearly not alone, given that those stores, which are owned by the same company, The TJX Companies, Inc. (TJX), generate billions of dollars in sales per year, including sales of $60 billion last fiscal year.

“With our proprietary planning and allocation systems and expertise, we can create a differentiated treasure hunt shopping experience that appeals to a broad range of shoppers across each of our markets,” said CEO Ernie Herrman on a recent earnings conference call.

Undeniably, appealing to those seeking great deals on unexpected finds has been a good business model. However, a subtle shift has emerged suggesting TJMaxx and Marshalls, collectively known as MarMaxx, may need to work harder to keep customers spending.

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According to a Morgan Stanley research report shared with me, MarMaxx is under pressure as shoppers increasingly feel penny-pinched by the economy, including rising inflation.

TJ Maxx, Marshalls stores face sales headwind

In TJX Companies’ second quarter, comparable sales at MarMaxx stores open at least one year grew only 1%, and that increase wasn’t due to foot traffic but to higher prices.

“Comp sales increased 1% and were entirely driven by a higher average basket, partially offset by a small decrease in customer transactions,” said CFO John Klinger about the results.

A drop in customer transactions isn’t a recipe for success, and TJX’s struggles are evident in the company’s stock price, which has fallen 17% since mid-June, raising questions about what’s behind TJMaxx and Marshalls’ lackluster customer trends.

Morgan Stanley analyst Alex Straton took up the subject directly in his report, “What’s Going Wrong at Marmaxx? Our Survey Says More Macro Than Micro.”

“Cutting overall spend is the #1 reason for reduced Marmaxx spending, with TJ Maxx & Marshalls still leading Off-Price brand perception – we think indicative of a macro, not micro, problem. Notably, however, high prices rank #2, & Marmaxx is alone in seeing “good value” perception erode– pointing to a value perception gap that may be under-appreciated,” wrote Straton.

TJ Maxx and Marshalls have seen customer traffic slow as the economy bites into discretionary spending.Kevin Carter / Getty Images

TJMaxx stumbles amid a hit-and-miss economy

The biggest ‘macro’ likely impacting customer behavior is inflation, which has rebounded in the wake of the Iranian conflict’s impact on global oil markets.

Crude oil prices, as measured by West Texas Crude, have risen to about $90 from below $60 per barrel this year. Because oil is used throughout the economy to produce and ship goods and directly drives gasoline and diesel prices, customers’ wallets have been crimped.

In September, the Consumer Price Index, a common inflation measure, rose 3.4% year-over-year, up from 2.4% in January. AAA reports that the price of a gallon of gasoline has climbed to $4.37 from $3.12 a year ago.

Unfortunately, higher prices haven’t been offset by rising pay. Real wages, which subtract inflation from wage growth, were down 0.1% from July to August, suggesting dollars aren’t stretching as far.

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Given that backdrop, it’s easy to understand why Straton thinks the MarMaxx customer problem is economic, a point underscored by the Conference Board’s latest Consumer Confidence Survey data, which showed the weakest confidence among American consumers since 2014.

“Consumers’ net views of their Family’s Current Financial Situation turned negative in September, as the share of consumers who said their finances were “bad” rose to overtake those saying “good” for the second time since the question was introduced four years ago,” wrote the Conference Board’s economists.

Morgan Stanley thinks the problem could fix itself this holiday season

Morgan Stanley doesn’t think the situation improved in the third quarter, but a turnaround could occur over the holidays.

“N3M [next three months] spending intentions are negative across the Off-Price group, but worst at the TJX banners, with Marmaxx high-frequency demand data also still soft – making 4Q the earliest likely comp inflection,” wrote Straton.

In the fiscal fourth quarter last year, MarMaxx comp sales grew a much healthier 5%, and Straton thinks this year’s fiscal fourth quarter will be the soonest TJX may see a positive shift.

Much will likely depend, however, on how the economy evolves from here. If shoppers continue to feel pressured by inflation, including gasoline prices, they may still reduce how much they’re willing to spend on presents, or on discretionary purchases for themselves.

“Accessories/handbags (-17%), footwear (-10%), & home (-9%) are the biggest spending drags at Marmaxx,” wrote Straton.

It’s hard to imagine sales of those items surging from here if MarMaxx customers continue to feel bootstrapped.

Nevertheless, Straton struck an optimistic tone for investors:

“We see the pressure as temporary rather than structural, & would use ongoing stock weakness ahead of a potential 4Q improvement as a buying opportunity.”

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Elon Musk has taken investors on plenty of rollercoaster rides, but SpaceX (SPCX) shareholders have had an unusually compressed version of that experience since June.

The company completed the largest IPO in history, as reported by Reuters, pricing shares at $135 before closing its first day at $160.95. They later slid to $108 in early August before recovering toward $159 by early October.

For investors who bought into Musk’s newest public-market story, that tremendous choppiness has made the coming earnings report about much more than one quarter.

That said, in a note shared with me, Goldman Sachs has refreshed its view of SpaceX ahead of the company’s Q3 2026 earnings report, with particular attention to its fast-growing AI operation.

The issue is no longer simply whether Musk can build enormous amounts of compute. Goldman’s analysis centers on whether SpaceX can monetize that capacity at attractive rates while navigating a whole host of issues.

For shareholders, earnings may begin to separate the scale of Musk’s ambitions from the economics that support them.

Goldman sees AI becoming SpaceX’s next major growth engine

Goldman Sachs is heading into SpaceX’s Q3 earnings with a Buy rating and a $230 price target, up from $220, implying 45% upside from the stock’s recent price of $158.96.

The highlight of the report, though, is how aggressively Goldman has reset its expectations for what SpaceX could become beyond rockets and Starlink. 

Goldman raised its total sales forecasts to about $51.6 billion for 2026, $127.5 billion for 2027, and $205.6 billion for 2028, increases of roughly 8%, 19% and 14% from its prior estimates. EPS forecasts also moved higher, to $1.30, $3.96, and $7.01, respectively. 

The core driver is AI. 

Goldman now expects SpaceX’s AI segment to generate roughly $27.3 billion in 2026, $90.4 billion in 2027, and $146.7 billion in 2028. The bank believes the company can reach about 2.4 gigawatts of terrestrial compute capacity by year-end 2026, then scale toward 7 GW in 2027 and 10.6 GW in 2028. 

In my view, that clearly makes AI less of a side business and critical to the SpaceX investment case. 

Goldman is not abandoning the original pillars, either. It still sees major long-term opportunities in launch, connectivity, and AI, potentially spanning trillion-dollar markets over five-plus years.

Starlink remains critical as Sensor Tower data compiled by Goldman showed monthly active users up 21% year over year, while app-download growth accelerated to 59% in September. 

The bigger question heading into earnings is whether SpaceX can monetize its rapidly expanding compute footprint as effectively as Goldman now assumes, while keeping Starlink and launch growth moving alongside it.

Goldman Sachs raised its SpaceX forecasts as AI growth reshapes its earnings outlook.Brandon Moser / Getty Images

Musk says AI could eclipse SpaceX’s core businesses as Starlink targets telecom

Musk’s own view of SpaceX’s future is perhaps even more aggressive than Goldman Sachs’ latest forecast. 

In an August all-hands meeting, Musk called AI an “extremely important part of SpaceX’s future” and predicted that the company’s “AI revenue will exceed all other SpaceX revenue probably in September.” 

That’s a bold call, to say the least, as AI was still smaller than Starlink just one quarter earlier. SpaceX reported $7.81 billion of Q2 revenue, including about $2.56 billion from AI and $4.29 billion from Connectivity, which includes Starlink. 

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AI revenue nevertheless grew roughly 247% year over year, driven primarily by new infrastructure contracts. 

What stands out to me is that Musk isn’t positioning AI as merely another SpaceX business; the model looks tightly interconnected.

Starship lowers launch costs, Starlink supplies global connectivity, and SpaceX’s terrestrial and eventually orbital infrastructure supplies compute. Goldman now expects AI to become the company’s largest revenue segment, with hosting alone potentially generating $40 billion to $45 billion annually in 2027-28. 

Starlink, meanwhile, is beginning to challenge a much older industry.

On SpaceX’s Q2 call, management said AT&T (T), Verizon (VZ), and T-Mobile US (TMUS)  generate roughly $600 billion annually combined. They also argued that Starlink Mobile could take customers from them.

Musk said SpaceX believes its system can provide connectivity “probably better and higher bandwidth than what is currently available from cellular providers.” 

Starlink added more than 1.7 million consumer subscribers in Q2, held a monthly ARPU of around $66, and ended June with roughly 10,200 operational broadband and mobile satellites. 

I think that combination is critical to the investment case. SpaceX is no longer asking investors to value rockets, satellites, and AI separately. Musk is increasingly building them as parts of the same infrastructure platform.

SpaceX stock needs execution to justify the premium

I feel that SpaceX stock isn’t cheap enough for investors to ignore execution risk, even with the growth Goldman Sachs expects.

At Goldman’s reference price of $158.96, SpaceX trades at roughly 122 times 2026 earnings, 40 times 2027 earnings, and 23 times 2028 earnings. EV/EBITDA falls from about 55-times in 2026 to 25-times in 2027 and 15-times in 2028.

In other words, the valuation only starts to look more reasonable if SpaceX delivers the steep earnings ramp embedded in current forecasts. Free cash flow is also expected to remain negative through 2028, reflecting enormous capital spending.

That is why I would focus less on whether Q3 simply beats expectations and more on three things: AI monetization, Starlink growth, and the pace of compute buildout.

If management shows that hosting demand remains strong, Starlink continues to add users, and power/GPU constraints ease, I think the premium can be defended. If any of those weaken, the stock’s valuation leaves little room for disappointment.

Before earnings, I see SpaceX as a high-expectation stock where execution matters more than narrative.

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