Key Highlights

  • Sandisk shares are down 9.53% in pre-market trading despite a record quarter.
  • Q4 FY2026 revenue reached $8.965 billion, up 51% sequentially and 372% year over year.
  • Non-GAAP gross margin expanded to 84.8%, with EPS of $39.25, both well above estimates.
  • Full-year fiscal 2027 revenue guidance of $10.3 billion to $10.8 billion fell below investor expectations.
  • The board authorized an additional $1.5 billion in share buybacks.

Stock Falls Despite Record Results

Sandisk (NASDAQ:SNDK) is trading sharply lower today, extending Wednesday's post-earnings decline, even though the data storage solutions provider delivered record fourth-quarter results driven by surging AI-related NAND flash demand. Shares fell as much as 9.53% to $1,221.83 in pre-market trading, adding to Wednesday's decline as investors focused on disappointing fiscal 2027 guidance rather than the headline beat.

Sandisk, headquartered in Milpitas, California and a leading manufacturer of NAND flash-based storage solutions serving data center, client, consumer, and mobile markets, delivered fourth-quarter revenue of $8.965 billion, up 51% sequentially and 372% year over year, with non-GAAP gross margin of 84.8% and non-GAAP EPS of $39.25, all coming in above analyst estimates.

Guidance Disappoints Despite Strong Demand Signals

For the first quarter of fiscal 2027, the company issued revenue guidance in a range of $10.3 billion to $10.8 billion, along with non-GAAP gross margin guidance of $520 to $540 million and non-GAAP EPS guidance of $44 to $46, assuming 155 million diluted shares. While these figures reflect continued sequential growth, they appear to have fallen short of the market's more optimistic expectations built up ahead of the print.

Management pointed to surging AI-driven hyperscaler demand for NAND flash as a key growth driver, with data center revenue climbing to 38% of the portfolio from 12% a year earlier. The company also signed new hyperscale data center and edge customer partnerships, with reported purchase orders representing a minimum of $93.9 billion in total expected revenue over the agreements' duration.

Capital Return Program Expanded

The board authorized an additional $1.5 billion in share repurchases, bringing total remaining authorization to $15.5 billion, and the company executed $4.5 billion in buybacks during the quarter alone. Despite the strong capital return commitment, continued bullish analyst sentiment on the structural NAND supply deficit has not stemmed the selloff, as some investors appear to view the guidance as a signal that the pricing power seen in recent quarters may be moderating.

Conclusion

Sandisk's sharp decline despite record fourth-quarter results highlights how much weight the market is placing on forward guidance relative to backward-looking performance. With NAND demand from AI infrastructure still robust and a large buyback program in place, the stock's near-term direction will likely hinge on whether fiscal 2027 guidance proves conservative.

The scale of Sandisk's year-over-year growth this cycle, with revenue up 372% from the prior year period, reflects both a sharp recovery in NAND pricing and surging demand tied to AI server and hyperscaler storage buildouts. Even after today's pullback, shares remain up substantially from year-ago levels, underscoring the magnitude of the memory sector's recent rally even as investors reassess the pace of further gains from current levels.

This article is for informational purposes only and does not constitute financial, investment, or trading advice. Readers should conduct their own research or consult a licensed financial advisor before making any investment decisions.