Sandisk’s stock fell more than 6% in premarket trading on Friday, despite reporting impressive earnings that exceeded market expectations. Investors seemed to choose profit-taking over optimism after a substantial year-to-date increase of almost 300%.
The backdrop was one of high anticipation. Analysts were optimistic about Sandisk’s position in the NAND flash storage market, especially with the rising demand from AI data centers. The company reported revenue of $5.95 billion, up significantly from the previous year’s $4.72 billion. Adjusted earnings came in at $23.41 per share, smashing Wall Street’s expectations of $14.51.
But once the earnings report dropped, the mood shifted. Investors appeared to react swiftly to the news, opting to sell rather than hold on for what many had hoped would be further gains. This decision came after Sandisk’s stock had already enjoyed a remarkable run-up—trading at $1,406 just weeks prior on May 5.
Key factors influencing this shift:
- Sandisk signed three long-term contracts valued at $42 billion last quarter, indicating strong future revenue potential.
- NAND flash memory prices are projected to jump by 234% in 2026, suggesting an impending boom in profitability.
- Morningstar Research Services has placed a Hold rating on Sandisk stock, while Susquehanna Research raised its price target to $2,000 per share.
Experts like William Kerwin caution against over-exuberance: “When we take a longer-term view here, we think that this pricing up cycle is finite.” However, others believe that the favorable demand-supply dynamics will support continued growth for Sandisk into the next fiscal year.
As it stands now, Sandisk expects $8 billion in revenue and $31.00 in earnings per share for the current quarter. The company has already delivered $30.82 in adjusted earnings per share over the first nine months of the fiscal year—a clear indication that it can meet or even exceed these ambitious forecasts.
The market may be reacting to short-term fluctuations, but with such promising long-term contracts and an expected surge in NAND prices, Sandisk could very well continue its upward trajectory in the future.