In the rush to the exits on Sandisk (SNDK) after a slight current quarter guidance miss on Wednesday night, investors may be overlooking a blunt reality.
This company is executing well as it partakes in the AI boom driving demand for its memory chips.
This is how much Sandisk's sales rose in its just-completed fiscal year, Yahoo Finance AlphaSpace data shows. Looked at another way, the backdrop is so strong for memory chips that Sandisk closed out its fiscal year with $20.2 billion in sales, up from $7.4 billion a year ago.
What's more, Sandisk saw an acceleration in its sales growth in its fiscal fourth quarter to a 372% year-over-year rate.
Sandisk reported blowout fiscal fourth quarter 2026 results, comfortably beating Wall Street estimates with non-GAAP earnings of $39.25 per share on $8.97 billion in revenue.
The record top-line performance was driven by explosive demand for AI memory infrastructure, which propelled data center revenue up 103% sequentially to $2.98 billion.
But the stock tanked 10% early Thursday, primarily because the midpoint of Sandisk's first quarter fiscal 2027 revenue guidance ($10.3 billion to $10.8 billion) came in below consensus estimates of $10.8 billion.
Keep in mind that despite a summer swoon, Sandisk shares are still up close to 500% this year. So the guidance last night needed to be absolutely mind-bending to keep the bears from piling on. It wasn't.
Executives gave no indication on the earnings call that Sandisk's fundamental story was shifting negatively, however.
"We spent a lot of time over the last two or three quarters really working very deeply with our largest customers on committing demand. We have over four years of visibility now. We feel very good about where the franchise is," Sandisk CEO David Goeckeler said.
Barclays analyst Tom O'Malley:
"June revenue came in above with better pricing offsetting weaker than expected bit growth. Guide came in below which we suspect to again be from bit growth. The company is rationalizing lower bit growth by building up more inventory in order to meet the contractual obligations for the NBMs and still expects FY27 bit growth in the mid-teens. The company signed 5 new NBM deals at $94B minimum revenue and $91B RPO. These deals lock-up 50% of FY27 bits and ~2/3 of FY28 bits. The company also expects to continue major buybacks with excess cash after doing $4.5 billion in June. Overall, the story here remains the same and we think Sandisk is attractive on a pullback."
"We open an upside 90-day short-term view on Sandisk shares on potentially favorable industry results/commentary and forthcoming August investor day where we expect to hear updated commentary regarding 2HCY26 as well as calendar year expectations, technology roadmap and constructive capital returns. We remain constructive on NAND fundamentals: industry remaining in tight production supply, with eSSDs benefiting from extremely strong hyperscale demand for generative-AI training/inferencing services, and with vendors working to improve profitability over coming quarters through price increases and LTAs, while judiciously managing supply to expected demand."
Brian Sozzi is Yahoo Finance's Executive Editor, host of the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].
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