Key Highlights

● Sandisk fell 5.32% to $1,330.05 into its fiscal first-quarter report.

● Revenue reached $11.03 billion, with adjusted Earnings of $49.51 a share above guidance.

● An eight-for-one Stock Split is set, with split-adjusted trading expected from November 20.

● Datacenter Revenue rose 61% from the prior quarter to $4.80 billion.

Why was Sandisk (NASDAQ:SNDK) one of the most actively traded US stocks on Thursday? The flash-memory maker was scheduled to report fiscal first-quarter 2027 results after the bell, and the stock went into the print in retreat. Shares fell 5.32% in the regular session to close at $1,330.05, after trading down about 6% intraday. Roughly 6.87 million shares changed hands. That is about 0.8 times the usual volume, but at a four-digit share price it was worth about $9.14 billion in traded value, ninth among US stocks.

The broader tape did not help. Alphabet (NASDAQ:GOOGL) fell more than 12% after its results revived worries about the cost of the artificial intelligence build-out, and the Nasdaq Composite closed 1.4% lower. Memory peer Micron Technology (NASDAQ:MU) dropped almost 5%. The stock's Market Value at the close was about $192.23 billion, and it is a member of the S&P 500 and Nasdaq-100.

A double beat, then a choppy after-hours session

After the close, Sandisk reported revenue of $11.03 billion for the quarter ended October 2. That was up 23% from the prior quarter and 378% from $2.31 billion a year earlier, when the quarter had one more week. It was also above the company's own forecast of $10.30 billion to $10.80 billion. One market report noted this was the fifth straight quarter in which revenue came in above the top of the guided range. Adjusted Earnings Per Share were $49.51, against guidance of $44.00 to $46.00 and a consensus of about $46.27 cited in media coverage. GAAP earnings were $52.60 per share, helped by a $513 million gain on Equity securities. The non-GAAP gross Margin was 85.1%, compared with 29.9% a year earlier.

For the fiscal second quarter, management guided to revenue of $12.20 billion to $12.60 billion, adjusted EPS of $55.00 to $57.00 on a pre-split basis, and an adjusted gross margin of 84.5% to 85.5%. The company also announced an eight-for-one stock split. Holders of record at the close on November 9 will receive seven additional shares for each share held, and split-adjusted trading is expected to begin on November 20.

The after-hours reaction was choppy. One market wrap showed the stock up 1.8% shortly after the release, then 3.9% lower by the end of extended trading. Other reports captured moves in both directions at different times. Live coverage put the regular-session decline down to positioning. Expectations were high going in: consensus EPS was above the top of management's range, and the stock had already fallen about 21% over the previous month.

What Sandisk does and where the growth is coming from

Sandisk was spun out of Western Digital (NASDAQ:WDC) in February 2025. It designs and sells NAND flash memory and products built on it, including solid-state drives, memory cards and USB drives, and is based in Milpitas, California. It reports three end markets, and the quarter showed how sharply the mix has shifted.

Datacenter revenue, mostly enterprise SSDs sold into AI and cloud infrastructure, rose 61% from the prior quarter to $4.80 billion, or 44% of sales. A year earlier that line brought in $269 million and was 12% of revenue. Edge revenue, which covers storage in PCs, phones, consoles and cars, grew 7% to $5.83 billion and was 53% of sales. Consumer revenue fell 29% to $397 million, just 4% of the total, down from 28% a year ago. Management has described this as a deliberate shift toward the highest-value markets. Behind it is a tight NAND market. Before the report, market commentary cited an industry forecaster's expectation that NAND contract prices would rise 15% to 20% from the third quarter to the fourth.

Capital returns and the balance sheet

The company has turned much of that profit into buybacks. Sandisk repurchased $5.0 billion of stock in the quarter, about 3.2 million shares, and roughly 6 million shares over the past two quarters, about 4% of the share count. Shares outstanding fell to 144 million on October 2 from 146 million on July 3. In August the board added $14 billion to the repurchase program, leaving $15.5 billion authorized at the time. Cash and equivalents were $5.14 billion at quarter-end, with no Debt shown, and the company pays no dividend.

At its August investor day, CFO Luis Visoso said the aim was "to return 100 percent of excess cash to our shareholders after investing in the business." The company said the split is meant "to make the stock more accessible, including to employees."

Valuation

On market data, Sandisk trades at about 18.3 times trailing earnings of $72.89 per share, for a market value of roughly $192 billion. That is above Micron at about 12.6 times but well below logic-chip names such as Advanced Micro Devices (NASDAQ:AMD), at about 145 times. Trailing figures understate the earnings run-rate, though. The fiscal second-quarter EPS guide alone is $55 to $57, and before the report media coverage cited consensus fiscal 2027 EPS of about $214.82. On those numbers the forward multiple is in the single digits. Low multiples on what may be peak earnings are typical for memory stocks, because investors discount how long elevated pricing will last.

The bull case and the bear case

Supporters point to the datacenter ramp, margins above 85%, repeated beats of the company's own guidance, and aggressive buybacks. At its August investor day, Sandisk said long-term contracts under what it calls a "New Business Model," signed with eight customers, cover about half of its fiscal 2027 bit supply. It has also set a non-GAAP gross margin target of about 80% for fiscal 2028 through 2030. If that holds, it would mean the company has made memory less cyclical than it has been in the past.

Skeptics focus on the cycle. Memory pricing has always swung with supply, and new capacity, including from Chinese producers, could cap prices. Cloud providers could slow AI spending. Thursday's reaction to Alphabet's negative free Cash Flow showed how sensitive the group is to that risk. Consumer revenue keeps shrinking. Management also flagged swings in average selling prices and trade policy as risks. The long-term contracts are new and have not been tested in a downturn.

Before the report, analysts' fiscal 2028 estimates implied growth slowing to about 19%, which suggests many expect the cycle to cool. The stock has also been very volatile. It is up more than 470% this year, but it fell 47% in July and closed Thursday about 44% below its June intraday high of $2,354.39.

What to watch next

The next dates are the November 9 Record Date and November 20, when split-adjusted trading begins. Each share will become eight, so at Thursday's close the adjusted price would be about $166. A split does not change the company's value, though it can broaden retail ownership. Beyond that, investors will track whether NAND contract prices keep rising into early 2027, whether datacenter revenue keeps growing at its current pace, and how hyperscaler Capital spending plans change after this week's results from Alphabet, Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN).

Results from memory peers and further share repurchases are also worth watching. The fiscal second-quarter report will show whether Sandisk can again beat the top of its own range, now set at $12.6 billion.