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🔥SanDisk Valuation Breakdown | The Long-Term Contract Puzzle Behind the $2400 Price Target The $2400 target price corresponds to a 10x valuation of SanDisk's FY2028 earnings per share, based on the company's disclosed assumption of a long-term gross margin of about 80% as of August 12. ▪️Rosenblatt initiated coverage with a Buy rating on September 22, setting a target price of $2400, while the closing price that day was $1887. ▪️Capacity is locked by multi-year agreements with 8 customers: minimum revenue of $93.9 billion, remaining performance obligations of $91.1 billion, plus $16.5 billion in guarantees, covering about two-thirds of bit shipments for FY2028. ▪️On the flip side: FQ4 revenue was $8.97 billion, up 51% quarter-over-quarter (previous quarter up 97% QoQ), with two-thirds of growth coming from price increases rather than shipment volume; gross margin peaked temporarily at 84.6%, with next quarter guidance expected to fall back to 83–85%. ▪️Micron is in a similar situation: 16 take-or-pay contracts cover about one-third of NAND capacity, minimum revenue of $100 billion, with $10 billion in customer deposits expected this quarter. Market divergence is no longer about whether AI demand can convert into orders. Both companies have somewhat moved away from pure spot demand logic, relying on long-term contracts as a floor: long contracts secure the revenue floor, while price increases determine the profit ceiling. The soul-searching question: Are these customer capacity-locking long-term contracts truly reflecting real market demand, or are they a form of disguised financing? 👉 What do you think? Are long-term contracts demand guarantees or financial packaging? Let's discuss in the comments! ⚠️Basic fundamental information only, not investment advice