Target price $1,000! The Wall Street firm most bullish on SanDisk values the company at just 11x P/E.

Following strong financial results, Bernstein analyst Mark C. Newman raised SanDisk’s target price from $580 to $1,000—a 72% increase. This aggressive target is based on the firm’s forecast of $90.96 in earnings per share (EPS) for fiscal year 2027, implying a P/E ratio of only 11x. Even more striking, the analyst projects SanDisk’s free cash flow for FY2027 to reach $13.8 billion, corresponding to an EV/FCF multiple of just 10.3x—195% higher than the market consensus. For investors, the standout highlight is the explosive expansion in gross margin: Non-GAAP gross margin reached 52.1% in Q2, far exceeding the market’s expectation of 42%, with Q3 guidance soaring to 65–67%, signaling the company’s entry into a super-profitability cycle. Significant earnings beat, gross margin expansion as the key highlight The analyst noted that SanDisk’s Q2 FY2026 results comprehensively exceeded expectations. Revenue hit $3.0 billion, up 31% year-on-year and 13.2% above the consensus estimate of $2.673 billion. Key drivers included low-single-digit percentage growth in unit shipments and a sequential surge of over 35% in average selling price (ASP)—far surpassing the market’s expectation of 16%. Profitability metrics were especially impressive. Non-GAAP gross margin expanded to 52.1%, 812 basis points above the consensus expectation of 42% and up 2,220 basis points from last quarter’s 29.9%. Operating margin reached 37.5%, versus a consensus of just 24.4%—a 1,310-basis-point outperformance. Non-GAAP EPS came in at $6.20, 77.4% above the consensus of $3.49. The analyst emphasized that margin expansion was driven not only by ASP increases but also by substantial cost reductions and product mix optimization. Unit costs declined approximately 9% quarter-on-quarter, partly due to lower factory ramp-up expenses—this quarter’s ramp-up costs fell to $24 million, down from $72 million last quarter, and are expected to be fully eliminated going forward. Q3 guidance serves as the true catalyst for share price surge, gross margin to breach 65% Bernstein analysts believe Q3 guidance is the real catalyst driving the stock’s sharp rally. The company guided Q3 revenue at $4.4–$4.8 billion, representing a 53% sequential increase—implying a more than 55% sequential jump in ASP. Even more astonishing, Non-GAAP gross margin guidance stands at 65–67%, a 1,490-basis-point sequential expansion. This will propel Non-GAAP EPS to $12–$14, vastly exceeding the analyst’s base-case forecast of $6.50—and even surpassing the optimistic-case forecast of $9.10. The analyst pointed out that over 90% of the company’s sales are still based on short-term contracts, but it is evaluating a shift toward long-term agreements to secure higher, sustainable pricing and fixed volumes. The company has already signed one long-term agreement featuring upfront payments, and several others are under negotiation. Major upward revision to earnings forecasts: FY27 EPS 188% above consensus

Buffett’s holdings are transparent—why would anyone manipulate the stock price upward for him? Aren’t they afraid he’ll dump his shares?

In 2023, Berkshire Hathaway reported revenue of $364.482 billion and net income of $96.223 billion (approximately RMB 690 billion), significantly exceeding the market’s prior expectation of $40.8 billion and reversing last year’s net loss of $22.759 billion. Meanwhile, Buffett’s current cash reserve stands at a record high of $167.6 billion. Succession announcement Also in 2024, Warren Buffett’s annual shareholder letter—his 46th, released amid widespread anticipation—was made public. In it, Buffett credited Charlie Munger as the architect of Berkshire Hathaway, while describing himself as the company’s general contractor. Moreover, addressing the highly anticipated question of succession, Buffett stated that Greg Abel, Berkshire’s Vice Chairman, is fully prepared to assume the role of CEO of Berkshire Hathaway tomorrow. Following Buffett’s succession announcement, Berkshire’s stock rose 2%. This gain stemmed primarily from the removal of uncertainty, as well as investor optimism that the new leader may deliver unexpected positive surprises in the future. Who is Greg Abel—and what are his market credentials? Greg Abel was born in Canada in 1962. He joined Berkshire Hathaway in 1999. Currently, Abel serves as CEO and Chairman of Berkshire Hathaway Energy, overseeing subsidiaries engaged in coal, natural gas, hydroelectric, wind, solar, geothermal, and nuclear power—with over 23,800 employees. Amid exceptionally complex macroeconomic conditions in 2020, the energy company generated $15.556 billion in revenue and $3.4 billion in profit. Abel enjoys high regard in the market: The Wall Street Journal once dubbed him a “shrewd dealmaker.” In 2013, Buffett remarked: “I always make time when Greg calls—he brings me great ideas, and his thinking and business approach are truly innovative.” 19.8% compound annual growth rate—focusing on Buffett’s investment journey Over decades, Buffett’s extraordinary performance has earned him universal recognition among global investors as the “Oracle of Omaha.” A few figures illustrate his prowess: From 1965 to 2023, Berkshire Hathaway’s per-share book value compounded annually at 19.8%, markedly outpacing the S&P 500’s 10.2%. From 1964 to 2023, Berkshire’s total market value grew by a staggering 4,384,748%—or 43,847-fold. In the market, Buffett consistently adheres to his value-investment philosophy of “investing only in businesses he understands,” focusing primarily on traditional consumer and financial sectors.

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