SanDisk (SNDK) reported fiscal fourth-quarter 2026 results on Aug. 5, 2026, beating market consensus on both revenue and earnings for the quarter ended July 3, 2026. GAAP gross margin reached 84.6%, a company record. Even so, the stock fell after management issued a fiscal Q1 2027 revenue outlook that came in below bullish Wall Street expectations. Shares dropped 5.4% to $1,350.50 after the earnings release and slid further to $1,243 in after-hours trading.
Q4 revenue rose 51% from the prior quarter
SanDisk posted quarterly revenue of $8.97 billion, up 51% quarter over quarter. The company said roughly one-third of that growth came from higher shipment volumes, while the other two-thirds came from a sharp increase in average selling prices, or ASPs, pointing to stronger pricing power across its product lineup.
Profitability also improved sharply. GAAP gross margin came in at 84.6%, setting a new record, which the company attributed mainly to a product mix shift toward higher-value enterprise and data center markets.
On earnings, non-GAAP diluted EPS was $39.25, while GAAP diluted EPS reached $43.97. Both figures beat market consensus.
Full-year revenue jumped 175%, led by data center demand
For the full fiscal year 2026, SanDisk reported revenue of $20.25 billion, up 175% from a year earlier. GAAP net income for the year totaled $11.43 billion, and earnings per share came in at $73.76.
Among its three end markets, data center was the strongest growth engine. Revenue from that business rose 103% quarter over quarter and 437% year over year in the fourth quarter, reflecting strong demand for high-performance storage tied to AI computing infrastructure.
Q1 fiscal 2027 outlook missed Wall Street’s high-end view
The market reaction turned negative because investors focused on the company’s forward guidance. SanDisk expects fiscal Q1 2027 revenue in a range of $10.3 billion to $10.8 billion, below the $11.16 billion level widely expected by Wall Street analysts.
The company also guided 2027 gross margin to a range of 83% to 85%. That drew attention because the just-reported quarter had already reached a record 84.6%, raising concerns in the market about whether growth momentum may cool from here.
Analyst Jukan says volume matters more than price
Citrini analyst Jukan pushed back on that reading. He said some in the market are treating a flattening at high gross margin levels as a sign that the cycle is peaking, while missing what he sees as the more important point.
According to Jukan, with the AI supercycle still in place, capital spending by major technology companies rising, and supply at computing companies such as Nvidia still tight, the memory market is unlikely to see a stand-alone supply-demand reversal if other conditions remain unchanged.
He said investors should focus on quantity rather than price. In his view, even if gross margin stops rising, profit can still expand significantly as long as shipment volume keeps growing and long-term agreements, or LTAs, set a floor under earnings.
Jukan also said memory stocks have tended to decline before gross margins reach their actual peak in almost every cycle, so this pullback alone does not prove a trend reversal.
SanDisk adds five more NBM deals and approves a $14 billion buyback
On the earnings call, management said fiscal 2026 performance rested on two pillars: leadership in its technology portfolio and the strategic role of data centers as the company’s core growth engine.
SanDisk also said that since announcing five new business model, or NBM, agreements in April this year, it has recently signed five more. Three came from new customers, and two were expansions of existing relationships.
The company described NBM agreements as similar to long-term purchasing agreements, or LTAs. It said those agreements support profitability and help maintain disciplined capital spending, with the goal of avoiding over-expansion at the top of the cycle and stress during downturns.
SanDisk’s board also approved an additional $14 billion share repurchase program. Jukan said that level of shareholder return, together with NBM and LTA protection, could push the market to reprice memory names from traditional cyclical stocks toward core infrastructure for the AI era.