Memory prices could double again, but is it already priced in?

What happened

Sandisk's memory prices could double again in fiscal 2027, driven by sustained AI demand and tight NAND supply, according to a recent Motley Fool article. However, the DeepValue master report warns that the stock at $1,617.7 already prices in prolonged peak shortage economics, with earnings driven by a 248% ASP increase rather than volume growth. The report maintains a WAIT rating, citing risks of ASP normalization, LTA penalties, and margin compression, with an attractive entry near $1,250.

Implication

Investors should wait for a better entry near $1,250 or until Sandisk proves its long-term agreements can sustain margins above 79% through a pricing cycle. The current price offers insufficient upside for new positions.

Thesis delta

The news reinforces the bull case of further price increases, but the DeepValue report already sees this as largely priced in. The key shift is that the market's optimism may be overextended, and the downside risk from pricing normalization is not fully discounted. The thesis moves from 'wait for more evidence' to 'wait for a lower price or proof of margin durability.'