SanDisk (NASDAQ:SNDK) reported a sharp surge in third-quarter revenue on Thursday, significantly exceeding Wall Street expectations as demand for datacenter products and stronger pricing supported results.
The company posted revenue of $5.95 billion for the quarter, marking a 251% increase from the same period last year and comfortably surpassing analyst forecasts of $4.73 billion.
Shares initially moved higher following the release but later reversed, falling around 5% in premarket trading on Friday.
CEO Highlights Strategic Shift Toward High-Value Markets
“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, led by Datacenter,” said David Goeckeler, CEO of SanDisk.
The company also delivered adjusted earnings per share of $23.41, exceeding expectations by $8.75 compared with the consensus estimate of $14.66.
Goeckeler added that SanDisk is transitioning toward a new business model focused on multi-year customer agreements supported by firm financial commitments.
Analysts See Datacenter and AI as Core Growth Drivers
“The quarter reinforces a clear inflection point in the datacenter business, which is rapidly emerging as the primary driver of growth and profitability, supported by accelerating AI-related demand,” analysts at Raymond James said.
“This is further supported by deepening customer engagement, with the company announcing five multi-year agreements, enhancing visibility, pricing and margin durability – key elements of our investment thesis.”
The firm raised its price target on the stock to $1,470 from $725.
AI Demand Reshapes Pricing and Industry Dynamics
AI-driven supply constraints have enabled memory and storage companies to increase pricing. Ben Reitzes previously noted that firms like SanDisk could move toward subscription-style models tied to long-term contracts, potentially lifting valuation multiples significantly. He also pointed to rising demand for both agentic and physical AI as a key driver for the sector.
Market sentiment around SanDisk has turned increasingly positive in recent weeks, supported by tight NAND supply and strong demand for AI infrastructure. Investors are particularly focused on the company’s enterprise solid-state drive segment, which analysts expect to gain market share.
The ramp-up of BiCS8-based QLC enterprise SSDs is anticipated to support growth in datacenter storage volumes, improve pricing trends, and expand margins.
Outlook for the Next Quarter
SanDisk expects fourth-quarter revenue to range between $7.75 billion and $8.25 billion, with projected non-GAAP diluted earnings per share between $30.00 and $33.00.