Sandisk (NASDAQ:SNDK) shares jumped 24% on Friday after the data storage maker reported quarterly results that beat expectations and issued guidance well above Wall Street estimates, driven by strong demand for NAND products related to artificial intelligence infrastructure and data centers.
This rally brought Sandisk’s gains since its market debut to approximately 1,755%.
Sandisk reported second-quarter revenue of $3.03 billion, beating analysts’ estimates of $2.64 billion, while adjusted earnings per share came in at $6.20, nearly double the consensus estimate of $3.33. Net income came in at $967 million, compared to expectations of around $498 million.
The company said demand for its NAND products continues to outstrip supply, supported by strong pricing and richer storage configurations in several end markets.
Bank of America analysts said Sandisk beat its own forecasts for the quarter and issued a third-quarter outlook that was “significantly above Street expectations,” citing both volume growth and significantly higher pricing.
Bit shipments increased by low single digits during the quarter, while average selling prices per gigabyte climbed in the range of 30%, analysts say. Data center revenue jumped 64% quarter-over-quarter, with strength extending beyond cloud hyperscalers to enterprise and edge data centers.
“Demand was strong across the board,” Bank of America wrote, adding that replacement cycles and the adoption of AI in personal computers and mobile devices were driving an increase in storage content per device.
Gross margin reached 51.1% in the second quarter, well above the company’s full-cycle margin target of 35%. Sandisk set a target of a median gross margin of 66% for the March quarter, which Bank of America said was “significantly higher” than historical levels.
For the third quarter, Sandisk forecasts revenue and earnings per share at a midpoint of $4.6 billion and $13, respectively, about 1.5 times and three times current Street estimates.
Sandisk saw widespread strength across all customer segments, including AI infrastructure builders, cloud hyperscalers, original equipment manufacturers and systems integrators. Its BiCS8 QLC storage product, known as Stargate, continues to progress through qualification with two major hyperscalers and is expected to begin shipping in the coming quarters, Bank of America said.
However, analysts have warned that rising NAND prices could ultimately weigh on PC and smartphone unit volumes.
Bank of America raised its price target on Sandisk from $390 to $850, citing significantly higher profitability expectations. The company raised its fiscal 2026 revenue and earnings guidance to $15.7 billion and $39.50 per share, respectively, from $10.9 billion and $16.21.
Analysts reiterated their buy rating, pointing to strong margins, expected eSSD share gains in calendar year 2026, undervalued joint venture assets and the long-term potential for industry consolidation.