Sandisk just had a day on Wall Street that felt like a tech bubble movie in fast forward. The data storage maker rode an AI wave so strong that both its latest results and its next‑quarter guidance blew past what even bullish analysts were bracing for.
AI demand lights a fire under SNDK
Investors did not walk to this stock; they ran.
- SNDK jumped about 14% in Friday trading, pushing the share price above 600 dollars and extending an already wild January rally.
- The stock has surged multiple times over the past year as markets woke up to how central high‑performance flash is to AI training and inference.
- Some analysts now describe Sandisk as a core storage engine for the AI era, not just a consumer memory brand.
Behind that move is one brutally simple story: huge demand, tight supply, and customers willing to pay up to keep their AI roadmaps on track.
Q2 2026: results that crush the bar
Sandisk’s fiscal second quarter set a new bar for what “AI upside” looks like in storage.
- Revenue jumped to about 3.03 billion dollars, far above the roughly 2.7 billion analysts had penciled in and up sharply from around 1.9 billion a year earlier.
- Net profit climbed to roughly 803 million dollars, or a little over 5 dollars per share, versus about 104 million dollars and under 1 dollar per share in the prior year period.
- On an adjusted basis, earnings hit about 6.20 dollars per share, smashing consensus expectations that sat near the mid‑3 dollar range.
- Datacenter revenue jumped more than 60% quarter‑on‑quarter as cloud and AI players ramped deployments of high‑end SSDs.
- Gross margins expanded into the 50‑plus percent zone, helped by better product mix, higher pricing and strong pull for enterprise NVMe SSDs.
Executives stressed that demand is not just strong on paper. In some product lines, they are effectively sold out, with customers prioritising “availability over price” as they race to build and scale AI infrastructure.
Q3 outlook: guidance that rewrites the script
If Q2 showed what AI can do to a storage P&L, the third‑quarter outlook shows what happens when that trend snowballs.
- Management guided Q3 revenue to a range of about 4.4 to 4.8 billion dollars, far above consensus, which sat close to 2.9 billion.
- Adjusted earnings are forecast between 12 and 14 dollars per share, versus analyst models that were closer to 4 dollars.
- The midpoint of that guidance implies a massive sequential step‑up in both sales and profitability, driven by AI datacenter demand and firm NAND pricing.
Morningstar and other research shops expect the current supply squeeze in flash to last for years, not quarters, with tightness potentially extending at least to 2028. That backdrop gives Sandisk unusual visibility and pricing power in a segment that used to feel purely cyclical.
Why AI is pulling storage this hard
Every big AI model—from chatbots to image generators—rests on three pillars: compute, networking and storage. In the last year, GPUs took most of the spotlight, but storage is now having its own moment.
Key AI‑driven forces behind Sandisk’s surge:
- Data center build‑outs for training and inference need stacks of high‑throughput NVMe SSDs.
- Cloud providers are scaling capacity ahead of demand to avoid bottlenecks once models and AI‑powered apps hit mass use.
- Enterprises shifting from testing to production AI workloads are locking in storage contracts early.
- Flash supply is constrained, giving large, trusted vendors like Sandisk leverage in multi‑year deals.
On the latest call, leadership framed Sandisk not as a company catching a lucky cycle, but as one that reset its cost base, mix and product roadmap specifically for the AI era.
Long‑term bets: Kioxia deal and analyst upgrades
Sandisk is also working to make sure this boom does not choke on its own success.
- The company extended its flash chip joint‑venture supply agreement with Kioxia in Japan out to the end of 2034, from a previous expiry in 2029.
- That deal gives it more confidence to support long‑duration AI infrastructure projects and hyperscaler roadmaps.
- At least five brokerages lifted their price targets after the print, with one high‑profile target going as far as 1,000 dollars per share.
- Some analysts argue that even after an enormous run, forward valuation still looks reasonable given the earnings power implied by guidance.
For investors, the message is blunt: as long as AI demand keeps rising faster than storage supply, Sandisk sits in a sweet spot where both pricing and volumes can work in its favour.
What traders and builders will watch next
In the next few quarters, markets will track a few simple, high‑impact signals.
- How fast AI storage revenue grows as a share of the total business.
- Whether hyperscaler orders stay strong even if macro conditions wobble.
- The pace of any new capacity investments and the impact on pricing power.
- Signs that supply begins to catch up with demand before 2028.
For engineers and product teams, the takeaway is clear: AI workloads are rewriting the rules of storage design, from throughput targets to endurance and latency, and vendors able to ship reliable, high‑density SSDs at scale are likely to stay in the driver’s seat.
