Sandisk's eye-popping earnings beat fails to extend the stock's big rally

By Britney Nguyen

The company says it's transitioning to a business model of 'multiyear customer engagements'

Sandisk stock was falling in after-hours trading on Thursday.

Sandisk's beat-and-raise earnings report doesn't seem like enough to lift the stock further after its 3,300% one-year surge.

The company delivered eye-popping levels of growth and upside with its fiscal-third quarter results, featuring revenue of $5.95 billion, up 251% from the previous year and far ahead of the $4.72 FactSet consensus. Sandisk (SNDK) reported adjusted earnings of $23.41 per share for the March quarter, crushing the consensus view for $14.62.

"This quarter marks a fundamental inflection point for Sandisk - where our technology leadership is enabling a deliberate shift in our mix toward the highest-value end markets," namely data centers, Sandisk CEO David Goeckeler said in a statement.

He added that Sandisk is shifting to a new business model of "multiyear customer engagements backed by firm financial commitments." That should improve the company's earnings power, Goeckeler said.

Yet shares slid 6.4% in Thursday's extended session, potentially reflecting profit taking or investor uncertainty about whether the new business model will limit the company's ability to capitalize on sizable pricing power down the road.

Data-center segment revenue in the latest quarter was $1.5 billion, topping the FactSet consensus of $1.1 billion, while Sandisk's edge business saw revenue of $3.7 billion, ahead of estimates for $2.2 billion. Consumer revenue came in below expectations, however, at $820 million, while analysts had been looking for $1.3 billion.

For the June quarter, Sandisk is guiding for revenue to come in between $7.8 billion and $8.3 billion, well ahead of the $6.6 billion that analysts were modeling.

Earlier this week, Melius analyst Ben Reitzes initiated coverage of Sandisk's stock with a buy rating, noting that chip-related companies "are getting promoted and becoming so valuable."

Memory and storage makers have benefitted from artificial-intelligence-driven supply shortages that have allowed them to raise prices. Reitzes said he could see suppliers like Sandisk end up following a sort of subscription model for customers looking to commit to multiyear deals. That could double, or even triple, the stock's valuation multiple, he said - and surging memory demand for agentic AI and physical AI could help as well.

See more: Sandisk shares have soared over 3,000% in a year. Is a stock split next?

Jefferies analyst Blayne Curtis said in a note earlier this month that surging AI demand and ongoing negotiations for long-term agreements supported his view that prices for NAND memory will go higher, benefitting Sandisk.

Additionally, with Sandisk expected to start shipping its quad-level cell enterprise solid state drives to two customers over the next several quarters, Curtis sees the potential for market-share improvements.

-Britney Nguyen

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04-30-26 1708ET