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LivestreamMenuSandisk has bounced nearly 35% this week, and investors are aggressively piling back into the memory space. The immediate catalyst is a major upgrade from JPMorgan , which moved the stock to an overweight rating and set a massive $2,250 price target. This target implies roughly 47% upside from Thursday’s close, just short of its all-time intraday high of $2,354.39 in late June. In order to capture the opportunity in this high beta name, I am using a put spread to create a short-term income stream due to the tremendous elevation in option premium for this memory king. The upgrade directly follows Sandisk’s 2026 Investor Day in New York, where management presented a long-term financial framework that fundamentally changes how the Street must value this memory-chip maker. Historically, memory has been a volatile, highly cyclical industry. However, Sandisk is aggressively shifting toward a new business model that locks in long-term agreements. On CNBC Friday morning , CEO David Goeckeler articulated that instead of quarterly price haggling, Sandisk is now locking customers into long-term strategic agreements that last up to four years. Goeckeler noted that these conversations have shifted from procurement teams to the CEOs and CFOs of the world’s largest companies, as securing artificial intelligence infrastructure is now highly strategic. The company has already signed eight of these agreements, representing roughly $100 billion in total contract value. This structural reset provides significant revenue visibility, drives gross margins higher, and materially reduces cyclical risk. Similar to the “picks and shovels” equipment makers in the semiconductor space, high-capacity memory serves as an essential AI tollbooth. As hyperscale and cloud customers increasingly deploy flash memory for AI inference workloads, the total addressable market for NAND is expected to explode from roughly $70 billion in 2025 to over $300 billion in 2026. When you combine that rapidly expanding market with Sandisk’s newly authorized $14 billion share repurchase program, the fundamental floor under this stock looks incredibly firm. Bullish put credit spread Implied volatility is highly elevated following the massive two-day price surge. Because the call spread structure was too expensive, utilizing a bullish put credit spread allows an investor to create an income stream off of the elevated premium in this high-flying stock. This is a strategic and more cost-efficient approach to capture enhanced volatility while keeping risk strictly defined. Looking at the options chain for next week’s expiration: Sold the 8/21/2026 $1,350 put for $11.50 Bought the 8/21/2026 $1,300 put for $5.50 Net Credit: $6.00 SNDK was bouncing around $1,600 when this trade was executed. This structure generates an immediate income stream of $6.00, or $600 per contract, while strictly defining downside risk. Our maximum risk is $44.00, or $4,400 per contract, which is the width of the spread ($50) minus the credit received ($6.00). As long as Sandisk stays above $1,350 by the Aug. 21 expiration, an investor collects the $6.00 or $600 per one put spread sold. DISCLOSURES: Kilburg executed this bullish put credit spread All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More
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