TLDR
- SanDisk posted Q2 revenue of $3.03 billion, beating estimates by $340 million, while net income surged 672% year-over-year to $803 million
- Shares jumped 17% in pre-market Friday and have gained 125% year-to-date as AI infrastructure spending accelerates
- The company guided Q3 revenue to $4.6 billion versus $2.9 billion consensus, with EPS forecast of $14 against $5.11 expected
- Data-center revenue climbed 76% as AI companies prioritize flash storage supply over pricing in a constrained market
- SanDisk secured its Kioxia supply partnership for nine additional years, extending the agreement through end of 2034
SanDisk delivered a knockout quarterly report Thursday that sent shares soaring 17% in Friday’s pre-market session. The storage company crushed expectations across every metric as AI demand continues reshaping the semiconductor landscape.
Fiscal Q2 revenue hit $3.03 billion, well ahead of the $2.69 billion Wall Street forecast. Net income reached $803 million, translating to $5.15 per share and marking a 672% jump from last year. Analysts had projected just $3.33 per share.
The stock has now gained more than 125% in 2026. Shares are trading above the $395.93 average price target from analysts covering the company.
Flash storage demand is exploding as AI companies build out infrastructure. SanDisk supplies the memory chips that power solid-state drives in data centers. These drives store the massive datasets AI systems need for inference operations.
Data-center revenue increased 76% compared to the prior year period. CEO David Goeckeler said AI firms are constructing specialized facilities that require feeding stored information into computing chips to answer user questions.
Supply constraints are creating pricing power. Goeckeler noted that buyers are willing to pay premium prices to secure inventory. “Customers prefer supply over price,” he told Reuters.
Production Partnership Extended Through 2034
SanDisk moved to lock in its manufacturing capacity for the long haul. The company extended its flash chip supply deal with Kioxia Corp in Japan through 2034, adding nine years to the previous 2029 expiration date.
“We have incredible capacity in Japan that we’ve been investing in, and we continue to invest in,” Goeckeler explained. “Now we’re signed up together for another nine years.”
The arrangement provides access to joint venture production facilities. This ensures SanDisk can maintain output as demand continues rising.
Management acknowledged current orders exceed production capabilities. The company expects this tight supply-demand dynamic to continue throughout 2026, supporting sustained margins.
Forward Guidance Shocks Street
SanDisk’s Q3 outlook caught investors off guard. The company forecast revenue with a $4.6 billion midpoint, nearly double the $2.9 billion analyst consensus. Even the low end of the range exceeds Street expectations.
The profit forecast was equally striking. SanDisk guided to adjusted earnings between $12 and $14 per share for the current quarter. Analysts had been modeling $5.11 per share, representing a more than 150% gap.
The guidance indicates AI-fueled momentum is building rather than peaking. Flash storage has received less attention than DRAM memory in chip shortage discussions, but demand is now surging across both categories.
Profitability metrics are improving as volume scales. The dramatic earnings growth shows the company is extracting strong margins from revenue expansion.
Analysts rate the stock Moderate Buy, with 10 Buy and four Hold recommendations issued over the past three months. Coverage is expected to be updated following the results.
SanDisk’s Kioxia partnership now extends through 2034, providing nearly a decade of secured flash chip production capacity.
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