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Earnings Preview | After a 47% Crash in July, Can SanDisk (SNDK.US) Prove the "Misjudgment" with AI Demand in Its Earnings Report?

Earnings Preview | After a 47% Crash in July, Can SanDisk (SNDK.US) Prove the "Misjudgment" with AI Demand in Its Earnings Report?

智通财经智通财经2026/08/03 08:36
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By:智通财经

Storage chip giant SanDisk (SNDK.US) will announce its fiscal year 2026 fourth quarter and full-year results after the market closes on Wednesday, August 5, Eastern Time.

According to The Smart Finance APP, storage chip giant SanDisk (SNDK.US) will release its fiscal Q4 and full-year 2026 results after the market close on Wednesday, August 5 (Eastern time). The market is closely watching whether the surge in NAND flash sales, margins, and earnings—driven by strong demand for AI infrastructure—can be sustained.

This earnings report comes as SanDisk shares have experienced sharp volatility. While the company has benefited from rising data center storage demand and constrained NAND supply, SanDisk’s stock plummeted in July as investors took profits from some of this year's best-performing memory chip stocks.

Guidance Points to Another Quarter of Rapid Growth; Previous Results Set a High Bar

SanDisk officially projects Q4 revenue in the range of $7.75 billion to $8.25 billion. Based on the mid-point of $8 billion, that represents a quarter-over-quarter increase of about 34% and a year-over-year surge of more than 320% from the $1.9 billion in the same period of fiscal 2025.

The company forecasts Q4 non-GAAP diluted earnings per share (EPS) to be $30 to $33, compared to only $0.29 adjusted EPS in the prior-year period. Non-GAAP gross margin is expected to range between 79% and 81%.

Some market forecasts are even more optimistic than the company’s official guidance. According to third-party earnings data platforms, current analyst consensus expects revenue of approximately $8.42 billion and adjusted EPS of around $34.67. This suggests investors may expect SanDisk’s actual results not only to meet but possibly to exceed the upper range of guidance.

However, such elevated expectations also mean that unless the company provides an upbeat outlook for the new fiscal year, the stock could come under pressure even if results are solid.

SanDisk’s Q3 performance was impressive: revenue reached $5.95 billion, up 97% quarter-over-quarter and a stunning 251% year-over-year. Adjusted EPS rose to $23.41, while GAAP net profit was $3.62 billion.

Gross margin expanded to 78.4% for the quarter, compared to 50.9% in the previous quarter and only 22.5% a year earlier. The outstanding improvement in margin was mainly attributed to higher NAND prices and the company’s shift in product mix towards higher value-added customers and markets.

By segment, Q3 data center revenue reached $1.47 billion, jumping 233% quarter-over-quarter and soaring 645% year-over-year. Edge business revenue climbed 295% year-over-year to $3.66 billion, while consumer business revenue rose 44% year-over-year to $820 million but fell 10% quarter-over-quarter.

On the cash flow front, operating cash flow for the quarter was $3.04 billion, and cash on hand at the end of the period was $3.74 billion. The company had also paid off all long-term debt by quarter end.

NAND Pricing and Long-Term Contracts as Key Variables; Market Expectations Remain High After July Drop

AI workloads are driving massive demand for high-speed, persistent storage, strongly supporting enterprise-grade SSD and high-end NAND product sales. SanDisk is a major beneficiary, while industry capacity constraints have further strengthened pricing power and gross margins.

Investors will closely monitor: whether Q4 data center income continues to expand rapidly; whether higher average selling prices will keep supporting extraordinary gross margins. In addition, management’s comments on the purchasing activities of cloud service providers, enterprise SSD shipment volumes, and progress on next-generation BiCS technology will help gauge the sustainability of current growth momentum.

Long-term customer agreements represent another highlight. By the end of Q3, SanDisk had signed three long-term contracts under its new business model, with two more added in Q4. These multi-year arrangements include stronger financial commitments, aiming to improve revenue predictability while reducing the inherent cyclical volatility of the storage industry. Therefore, management's commentary on contract coverage for fiscal 2027, manufacturing capacity, and its partnership with Kioxia could be as important as the quarterly “headline numbers.”

SanDisk shares closed at $1,214.83 on July 31, down about 5.2% on the day. The stock fell roughly 47% over the month of July, marking its worst single month since returning to public markets as an independent company in February 2025 following a previously exceptional surge.

The heavy July sell-off suggests investors have become more cautious about high valuations and crowded AI-themed trades. However, the pullback also helps alleviate some valuation pressure ahead of earnings.

If the upcoming results deliver a revenue beat, gross margins above 81%, and an optimistic outlook for fiscal 2027, SanDisk’s stock could see a corrective rebound. Conversely, if NAND pricing weakens, data center orders slow, or management sounds cautious, then—even with strong year-over-year gains—the recent downward trend could continue.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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