SanDisk is a NAND flash-focused company producing solid-state drives, embedded storage, and memory cards through a Kioxia joint venture extended to December 2034. The stock has surged from about $42 to around $1,500, driven by an AI-related NAND shortage cycle and hyperscaler datacenter demand. Q3 FY26 showed major acceleration: revenue reached $5.95 billion, up 251% year over year, with EPS of $23.41 and a fourth consecutive beat. Non-GAAP gross margin rose to 78.4%. Datacenter revenue grew to $1.467 billion, and guidance for calendar 2026 datacenter growth was raised to the mid-70% range. Multi-year agreements and strong free cash flow support the outlook, while NAND’s historical cyclicality and potential supply response could pressure margins.
"NAND has never escaped its cycle. The stock has compounded 3,895% over one year, and the consumer segment already turned, falling 10% sequentially. Any supply response from Samsung, SK Hynix, or Kioxia could compress margins fast, and trailing valuation is steep at 16 times sales and a 15 price-to-book."
Read at 24/7 Wall St.
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