SanDisk (SNDK) Stock: AI Storage Demand Drives Massive Earnings Beat and Stock Surge

TLDR

• SanDisk stock jumped 17% in pre-market trading after beating Q2 earnings expectations with revenue of $3.03 billion versus $2.69 billion estimated
• The company’s fiscal Q2 profit surged 672% year-over-year to $803 million as AI data center demand drove a 76% increase in data-center revenue
• SanDisk forecast Q3 revenue of $4.6 billion midpoint, nearly double Wall Street’s $2.9 billion estimate, with adjusted EPS of $14 versus $5.11 expected
• The company extended its flash chip supply agreement with Kioxia Corp through 2034, securing capacity for nine more years
• Management stated customers are prioritizing supply over price as demand for flash storage in AI inference data centers outpaces available inventory

SanDisk stock exploded higher in Friday’s pre-market session, climbing 17% after the company delivered quarterly results that crushed Wall Street expectations. The data storage firm reported fiscal second-quarter revenue of $3.03 billion, beating analyst estimates of $2.69 billion.

Profit performance was even more dramatic. The company posted $803 million in net income, or $5.15 per share, representing a 672% jump from the prior year period. Analysts had expected adjusted earnings of just $3.33 per share.

The results pushed SanDisk shares up more than 125% year-to-date. The stock is now trading above its average analyst price target of $395.93.

Sandisk Corporation, SNDK

SanDisk supplies flash storage memory that forms the backbone of solid-state drives used in AI data centers. These drives store massive amounts of data that AI systems need to answer user questions.

Data-center revenue climbed 76% year-over-year. CEO David Goeckeler told Reuters that AI companies are building specialized data centers for inference operations, which require feeding stored data into computing chips.

The spending reflects how critical storage has become. “Customers prefer supply over price,” Goeckeler said, highlighting the tight market conditions.

Supply Constraints Drive Pricing Power

Management acknowledged the company couldn’t fully meet current demand levels. This supply-demand imbalance is expected to continue through 2026, giving SanDisk sustained pricing power.

The company secured its supply chain for the long term. SanDisk extended its flash chip supply agreement with Japanese partner Kioxia Corp through the end of 2034. The previous deal was set to expire in 2029.

The deal locks in SanDisk’s production capacity through joint venture facilities in Japan. This ensures the company can continue meeting AI-driven demand without major supply disruptions.

Guidance Points to Accelerating Growth

SanDisk’s forward outlook stunned investors. The company forecast third-quarter revenue with a midpoint of $4.6 billion, nearly double the $2.9 billion Wall Street anticipated. Even the low end of the guidance range sits well above analyst expectations.

Profit guidance was equally aggressive. SanDisk expects adjusted earnings of $12 to $14 per share for the current quarter. Analysts had been modeling just $5.11 per share, meaning the company’s guidance implies more than 150% upside.

The forecast suggests AI demand is accelerating rather than plateauing. Most chip shortage attention has focused on DRAM memory, which sits closer to processors. But flash storage demand is now surging as AI infrastructure expands.

Operating leverage is improving as production volumes increase. The sharp jump in profitability shows the company is converting revenue growth into bottom-line gains.

Wall Street currently rates SanDisk a Moderate Buy, with 10 Buy ratings and four Hold ratings issued over the past three months. However, these ratings are likely to be updated following the latest earnings report.

The stock’s rapid climb raises questions about near-term volatility. Some investors may take profits after the sharp rally, creating potential pullbacks for new buyers.

SanDisk extended its supply agreement with Kioxia Corp through 2034, securing nine additional years of flash chip production capacity.

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