Should Sandisk Stock Be in Your Portfolio Pre-Q2 Earnings?

Sandisk SNDK is set to report its second-quarter fiscal 2026 results on Jan. 29.

For the to-be-reported quarter, SNDK expects revenues between $2.55 billion and $2.65 billion. The Zacks Consensus Estimate for revenues is pegged at $2.67 billion.

Sandisk expects non-GAAP earnings between $3.00 and $3.40 per share. The consensus mark for earnings is pegged at $3.54 per share, up 9% over the past 30 days.

Consensus Estimate Trend

SNDK’s earnings have surpassed the Zacks Consensus Estimate in all the trailing three quarters. 
 

Sandisk Corporation Price and EPS Surprise

Sandisk Corporation price-eps-surprise | Sandisk Corporation Quote

Let us see how things have shaped up for the upcoming announcement.

Key Factors to Note Ahead of SNDK’s Q2 Results

Sandisk, which was spun off from Western Digital in February 2025, is expected to have benefited from strong demand for NAND storage products that are capable of processing large volumes of data quickly and efficiently. In the first quarter of fiscal 2026, Sandisk’s BiCS8 technology accounted for 15% of total bits shipped and is expected to reach the majority of bit production exiting fiscal year 2026. Rapid growth of AI is creating a strong tailwind for SNDK’s high-capacity, power-efficient SSDs enabled by the BiCS8 technology. This is expected to have driven by the company’s top-line growth.

BiCS8 technology is expected to boost Sandisk’s data center business, which reported revenues of $269 million in the first quarter of fiscal 2026, up 26% sequentially. This is expected to boost SNDK’s competitive position against the likes of Western Digital, Seagate and Micron Technology. Sandisk competes against these peers in SSDs, HDDs, flash memory, as well as hybrid storage.

In the first quarter of fiscal 2026, SNDK’s edge revenues jumped 26% sequentially and 30% year over year to $1.39 billion. The business is benefiting from the ongoing PC refresh cycle, aided by Windows 11 adoption, a trend expected to have continued in the to-be-reported quarter.

Sandisk Shares Outperform Sector & Peers

Sandisk shares have jumped 1080.6% in the trailing 6-month period, outperforming the Zacks Computer Storage industry’s return of 97.5% and the Zacks Computer and Technology sector’s appreciation of 15.5%. The company has outperformed its storage peers, including Western Digital WDC, Seagate STX and Micron Technology MU, over the same time frame, shares of which have returned 267.8%, 148% and 267.7%, respectively.

SNDK Stock’s Performance

Sandisk shares are trading at a premium, as suggested by a Value Score of F. In terms of the forward 12-month price-to-sales (P/S), Sandisk is trading at 5.75X, higher than the industry’s 2.33X.

SNDK Stock is Trading at a Premium

Strong AI Demand to Aid SNDK’s Prospects

Sandisk is expected to benefit from a transformative shift in the NAND flash memory market, surging demand from AI applications and its technological leadership in next-generation storage solutions. As rapid expansion continues in the AI space, investments in data centers and AI infrastructure are projected to surpass $1 trillion by 2030, creating substantial long-term demand for SNDK's products. Rapid growth of AI is creating a strong tailwind for SNDK’s high-capacity, power-efficient SSDs enabled by the BiCS8 technology.

Growing interest in the company’s technology from global hyperscalers, neocloud and OEM customers is noteworthy. Major cloud customers are showing strong interest in SNDK's Stargate product line, which focuses on storage-optimised SSDs. The company currently has two hyperscalers qualifying its 128-terabyte drives built on BiCS8 technology, with a third hyperscaler and a major storage equipment manufacturer lined up for 2026.

The expanding infusion of generative AI in PCs and smartphones bodes well for Sandisk’s prospects. Average smartphone capacity per device is expected to grow in the high single digits in calendar years 2025 and 2026. Sandisk expects continued momentum in edge as device upgrades accelerate, driving increasing NAND content. Moreover, strong demand for high-bandwidth flash (HBF) technology as customers across data centers and the edge seek higher performance AI inference capabilities. The partnership with SK Hynix is helping the company engage potential data center and edge customers for inference applications.

Conclusion

Sandisk is expected to benefit from strong demand for its BiCS8 technology, the ongoing PC refresh cycle and strong demand for HBF flash technology. These factors justify a premium valuation.

Sandisk currently has a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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