Following its February 2025 spin-off from Western Digital, Sandisk (SNDK) has emerged as a pure-play leader in the NAND flash memory and SSD (solid state drive) storage markets.
The stock has soared from $50 in August to $395 on Monday and is currently the top performer in the S&P 500 in the last year, benefiting from the "AI Data Cycle" shift from training to inference.
With the rollout of its high-density BiCS8 technology and a strategic rebranding of its client portfolio, SNDK is capturing significant value in the enterprise and AI-edge segments.
Primary Business Segments & Products
Sandisk has realigned its operations into three core market-facing segments:
Datacenter (28% of Revenue): This is the high-growth engine. Focused on hyperscalers (Amazon, Microsoft, etc), SNDK provides high-capacity, power-efficient SSDs. Key products include the Stargate controller-based drives and 256TB UltraQLC SSDs designed for AI inference.
Edge (61% of Revenue): Formerly the "Client" segment, this serves the PC and smartphone markets. At CES 2026, SNDK announced the retirement of the legacy WD Black/Blue labels in favor of the Sandisk Optimus™ brand. The Optimus GX Pro is now the flagship for AI PCs and professional workstations requiring high local processing speeds.
Consumer (11% of Revenue): A consistent cash cow comprising retail memory cards and portable SSDs. SNDK maintains dominance here through partnerships, recently eclipsing 900,000 units of its co-branded Nintendo Switch 2 microSD Express cards.
September Quarter Blowout and Roaring Guidance
Here's what my colleague Jeremy Mullin wrote on December 1st after Sandisk's Q1 FY'26 report...
Sandisk delivered a standout first quarter, easily topping expectations with EPS with a 37% EPS beat. Revenue came in at $2.38 billion versus $2.12 billion expected and profitability improved meaningfully as gross margin climbed to 29.8%, up 3.6 points both sequentially and year-over-year.
Guidance for the second quarter was even stronger, with Sandisk projecting EPS of $3.00–$3.40 versus $2.01 expected and revenue of $2.55–$2.65 billion versus $2.33 billion expected, alongside a sharp gross margin expansion to 41–43%. Management pointed to extremely tight supply-demand conditions expected through 2026 and into 2027, driving customers to sign multi-quarter agreements and pushing products onto allocation across markets.
Demand remains broad, with data center revenue up 26% quarter over quarter, solid edge momentum from PC refresh cycles and AI-driven smartphone storage needs, and a strengthening consumer pipeline supported by new gaming partnerships heading into the holidays.
Estimates Head Higher
Sandisk has seen positive analyst commentary from analysts that has come with updates and rising earnings estimates.
For the current quarter, estimates have gone from $1.77 to $3.25, up 83% over the last 7 days. For next quarter, we see similar movement with estimates going from $1.45 to $3.63, a move of 120%.
For the current year, estimates have gone from $6.31 to $12.59, a jump of 99%.
The longer-term looks even more promising, with estimates for next year going from $10.39 to $24.04, an increase of 130%.
(end of commentary from Jeremy)
NVIDIA Rubin Keeps Memory Burning
As analysts grasp the true nature of the memory shortage and the pricing power of key players like Micron (MU) and Sandisk, they cant' raise estimates fast enough.
In just the past week, the full-year FY'26 EPS consensus has jumped another 7% to $13.46.
The likely catalyst was NVIDIA's (NVDA) revelation at CES last week that the next GPU platform, Vera Rubin, is in production and will utilize more innovative memory designs.
From Citi...
We estimate that approximately 1,152TB of additional SSD NAND will be required per Vera Rubin server system to support NVIDIA's ICMS operations.
Accordingly, assuming Vera Rubin server shipments of 30,000 units in 2026 and 100,000 units in 2027, NAND demand driven by ICMS is projected to reach 34.6 million TB in 2026 and 115.2 million TB in 2027.
This represents 2.8% of expected global NAND demand in 2026 and 9.3% in 2027, a meaningful scale that is likely to create significant upside potential for demand.
As a result, with this structural demand increase factored in, the global NAND supply shortage is expected to intensify further.
Revenue Trends & Financial Outlook
Sandisk's financial profile has shifted from cyclical volatility to structural growth as AI infrastructure trends establish a long tail trajectory.
Top-line Growth: SNDK reported Q1 FY26 revenue of $2.31 billion, a 23% YoY increase. Guidance for Q2 FY26 suggests further acceleration to $2.6 billion (+38% YoY). And the full-year outlook is for a 42% advance to $10.45 billion, making the stock trade at 5 times forward sales.
Margin Expansion: Non-GAAP gross margins have expanded from the low 20s in early 2024 to 29.9% in Q1 FY26. Management targets 41%–43% for early 2026 as the product mix shifts toward higher-density enterprise drives and BiCS8 node transitions.
Profitability: The company achieved a net-cash-positive position six months ahead of schedule. Non-GAAP EPS is projected at $3.00–$3.40 for Q2 FY26, driven by disciplined supply management and the AI-driven storage "supercycle."
Investment Conclusion: Memory is the Future
While the stock’s rapid rally (up 680% since August) has raised valuation concerns (P/E of 29X), I believe the structural demand for high-bandwidth flash in AI infrastructure justifies the premium. SNDK will remain a "Strong Buy" as it secures qualifications with additional hyperscalers through CY2026.
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Sandisk Corporation (SNDK): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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