13 hours ago
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Geoffrey Seiler, The Motley Fool
Tue, May 5, 2026 astatine 9:35 AM CDT 5 min read
Sandisk's (NASDAQ: SNDK) beardown momentum continued arsenic it erstwhile again reported surging gross and important gross borderline enlargement successful its fiscal Q3 net results astatine the extremity of April. However, possibly the astir breathtaking quality to travel retired of the 4th was that the flash representation shaper has begun signing semipermanent contracts.
Sandisk has been a immense beneficiary of surging NAND (flash) representation prices, arsenic request has outstripped supply. This is the effect of the large 3 representation makers cutting NAND accumulation and turning their absorption toward DRAM (dynamic random entree memory), pursuing a marketplace illness a fewer years ago, and past the emergence of artificial quality (AI) information centers, starring to the abrupt request for massive, high-performance solid-state drives (SSDs) utilizing flash representation to clasp grooming data.
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These dynamics person helped powerfulness Sandisk's banal to emergence 422% this year, arsenic of this writing. However, contempt the gains, the banal lone trades astatine a guardant price-to-earnings (P/E) ratio of 7 times fiscal 2027 expert estimates. The crushed is that the flash representation concern has historically been highly cyclical, with ample boom-and-bust cycles. That is wherefore the revelation of its longer caller concern exemplary (NMB) contracts is simply a large deal.
Rapid maturation continues for Sandisk
For its fiscal Q3, Sandisk's gross soared 251% twelvemonth implicit twelvemonth to $6 billion. Data halfway gross skyrocketed 645% to $1.47 million, driven by AI information halfway enlargement and a displacement to triple-level compartment (TLC) SSDs. Its Edge segment, which includes smartphones and PCs, saw gross leap 295% to $3.7 billion, portion the user segment, which consists of things similar flash drives, saw gross ascent 44% to $820 million.
The gross maturation was led by higher NAND prices, which besides greatly boosted the company's gross margins. For the quarter, gross margins climbed from 22.5% past twelvemonth and 50.9% successful fiscal Q2 to 78.4%. The company's adjusted net per stock (EPS) flipped from a nonaccomplishment of $0.30 to a nett of $23.41. That's good supra the adjusted EPS of betwixt $12 and $14 it antecedently forecasted.
Looking ahead, Sandisk absorption guided for fiscal Q4 gross to beryllium betwixt $7.75 cardinal and $8.25 billion, up from $1.9 cardinal a twelvemonth ago. Gross borderline is expected to beryllium betwixt 78.9% and 80.9%, up from 26.2% a twelvemonth ago. Adjusted EPS, meanwhile, is forecast to soar from $0.29 to betwixt $30 and $33. Yes, that's a much than 10,000% increase.
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