SanDisk Stock Is Up 142% In 2026 on Massive AI Chip Demand

Key Stats for SNDK Stock

• YTD Price change for SNDK stock: 142%
• $SNDK Share Price as of Feb. 20: $650
• 52-Week High: $725
• $SNDK Stock Price Target: $724

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What Happened?

SanDisk Corporation (SNDK) stock continued to surge following a blowout fiscal second-quarter earnings report driven by explosive demand for flash memory chips used in AI infrastructure.

The storage giant has more than doubled in 2026 and is up 1,270% in the past 12 months.

The company absolutely crushed Wall Street expectations on every metric.

• Second-quarter revenue came in at $3.03 billion, up 31% sequentially and 61% year-over-year, demolishing analyst estimates of $2.69 billion.
• Adjusted earnings per share of $6.20 nearly doubled the $3.62 consensus forecast. Non-GAAP gross margins hit 51.1%, far exceeding the guided range of 41% to 43%.
• The results reflect a fundamental shift happening in the NAND flash memory industry.
• CEO David Goeckeler emphasized that artificial intelligence is driving a “step change in demand” as data center and edge workloads expand dramatically.
• For the first time ever, the data center segment is expected to become the largest market for NAND flash in 2026, overtaking traditional consumer markets like PCs and smartphones.
• SanDisk’s data center business grew 64% sequentially to $440 million in the quarter. The company is seeing “strong adoption across all types of AI infrastructure builders,” including cloud hyperscalers, edge and enterprise data centers, OEMs, and system integrators deploying AI at scale.
• The company completed qualification of its PCIe Gen5 high-performance TLC drives at a second major hyperscaler and expects to complete qualifications at additional hyperscalers in the coming quarters.
• Perhaps more impressive than the quarterly beat was the guidance.
• SanDisk issued third-quarter revenue guidance of $4.4 billion to $4.8 billion, nearly double the $2.93 billion analysts were expecting.
• Adjusted EPS guidance of $12 to $14 per share was more than double the $5.11 consensus estimate.
• Gross margin guidance of 65% to 67% came in massively ahead of the 49.3% analyst expectation.

CFO Luis Visoso explained that the NAND market is undergoing a “structural evolution catalyzed by AI” that should reduce cyclicality and create higher average long-term margins.

The company is experiencing clear and significant improvement in market conditions across all end markets, with demand continuing to exceed supply well beyond calendar year 2026.

Management revealed that customer demand is so strong relative to supply that the company is having to make strategic allocation decisions about which customers to prioritize.

SanDisk is focusing on “strategic customers” who recognize the value the company creates and are willing to engage in multiyear supply frameworks rather than transactional quarterly negotiations.

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What the Market Is Telling Us About SNDK Stock

The massive pop in SanDisk stock reflects investor excitement about a potential game-changer in the memory industry.

The company is arguing that NAND flash is transitioning from a cyclical commodity business to a strategic, structurally attractive industry with higher average returns.

Several factors are driving this transformation.

• First, AI workloads require dramatically more storage capacity than traditional computing. SanDisk now forecasts high-60s percentage exabyte growth in the data center market for 2026, up from mid-40s just last quarter.
• The company hasn’t even factored in NVIDIA’s recent announcements about “key value cache” storage requirements, which could add many exabytes of demand in 2027 alone.
• Second, the supply-demand imbalance is severe and unlikely to resolve quickly. SanDisk is running fabs at full utilization and maintaining its mid-to-high teens bit growth plan through the BiCS8 technology transition.
• Management emphasized they will not meaningfully increase capital spending without “high confidence that demand at attractive pricing levels is durable over a several-year horizon with financial commitments.”
• This is where the business model shift becomes critical. SanDisk is actively working to move away from quarterly price negotiations toward multiyear agreements with firmer commitments on supply and pricing.
• Management disclosed they have already signed one such agreement with a prepayment component and have several more in the pipeline.

Raymond James upgraded SanDisk Corporation stock to Outperform following the results, noting that “demand is exceptionally strong and likely only growing, supply is tightening to the point of potentially being sold out for years.” The firm believes the company should benefit from “longer-lived” data center production.

The supply shortage is becoming visible across the tech sector. Apple CEO Tim Cook mentioned during the company’s earnings call that Apple is facing supply issues with advanced memory, noting that rising memory prices will impact the business and that the company is evaluating “a range of options to deal with that.”

• SanDisk also announced an extension of its joint venture with Kioxia at the Yokkaichi facility through December 31, 2034, aligning it with the Kitakami JV expiration date.
• As part of the extension, SanDisk will pay Kioxia $1.165 billion between 2026 and 2029 for manufacturing services, with costs flowing through cost of goods sold over nine years. This provides supply certainty for the next decade.
• The company generated $843 million in adjusted free cash flow during the quarter, representing a 27.9% margin.
• SanDisk paid down an additional $750 million of debt and now has only $603 million remaining, putting it on track to reach a net cash position within quarters.
• Management indicated priorities are to continue investing in the business, build prudent cash reserves, and reduce remaining debt before considering capital returns.

There are some risks to consider. If AI demand proves less durable than expected, or if competitors aggressively add capacity, the favorable supply-demand dynamics could reverse. The company’s guidance assumes continued undersupply and pricing strength, which may not materialize if economic conditions deteriorate or AI deployments slow.

Additionally, while management is optimistic about shifting to multiyear agreements, it remains early in that transition. Most business is still transacted quarterly, and there’s no guarantee customers will accept SanDisk’s pricing and commitment terms.

However, the near-term momentum is undeniable. SanDisk stock is benefiting from a powerful combination of surging AI-driven demand, severe supply constraints, improving product mix toward high-margin enterprise SSDs, and a potential business model transformation that could structurally improve returns.

Investors should monitor whether the company can sustain these margin levels, whether multiyear agreements materialize in meaningful volume, and whether AI infrastructure demand continues accelerating or begins to plateau.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!