Key Takeaways
- Shares of SanDisk plummeted more than 9% during premarket hours even after exceeding Q4 projections for both earnings and revenue
- Fourth-quarter revenue reached $8.97 billion, representing a 372% increase from the prior year, while EPS hit $39.25 compared to the anticipated $34.96
- First-quarter revenue outlook of $10.3B to $10.8B fell short of the $10.82B analyst consensus
- Projected gross margin of 83%-85% underwhelmed compared to the 84.6% achieved in Q4
- With shares up more than 390% year to date, market participants had set the bar exceptionally high
On paper, SanDisk delivered an exceptional quarter. The financial results were impressive by any standard. Yet investors shifted their attention to future projections, and that’s where concerns emerged.
During Thursday’s premarket session, shares traded near $1,223, representing approximately a 9.4% decline, though the drop moderated to 5.4% once regular trading commenced.
Fourth-quarter adjusted earnings per share reached $39.25, comfortably surpassing the analyst consensus of $34.96. Revenue totaling $8.97 billion likewise exceeded the projected $8.48 billion. Just twelve months prior, the company reported earnings of 29 cents per share on $1.9 billion in revenue. The transformation has been remarkable.
Forward Outlook Falls Short
Looking ahead to Q1, SanDisk provided revenue guidance ranging from $10.3 billion to $10.8 billion. Wall Street analysts had anticipated $10.82 billion. The midpoint of the company’s forecast fell below market expectations.
Margin projections also underwhelmed investors. Management expects gross margins between 83% and 85% for the upcoming quarter, a modest decline from the 84.6% achieved in the previous period.
The adjusted EPS forecast of $44.00 to $46.00 aligned closely with the $44.21 consensus estimate, leaving minimal room for positive surprises.
Market analysts at Vital Knowledge captured the sentiment succinctly: “Numbers on an absolute basis are spectacular, but the shortfall on guidance is negative.”
Fourth-quarter data center segment revenue totaled $2.98 billion, more than doubling from the previous quarter and exceeding projections of $2.74 billion. Edge segment revenue jumped 48% to $5.43 billion. Meanwhile, consumer segment revenue contracted 32% sequentially to $556 million.
For the complete fiscal year 2026, total revenue surged 175% year over year to $20.25 billion. Full-year data center revenue increased 437%, propelled by robust demand for artificial intelligence infrastructure.
Shareholder Returns and Strategic Partnerships
SanDisk’s board of directors authorized an additional $14 billion for share repurchases, elevating total remaining buyback authorization to $15.5 billion.
Management also disclosed that the company has executed five additional New Business Model agreements following its April earnings announcement, increasing the total to ten such agreements since that update.
Chief Executive Officer David Goeckeler addressed the volatility in current demand patterns. “We want to get this kind of boom and bust out of it,” he stated during the earnings conference call. “We want to get more consistent and deeper relationships with our customers so we can plan better and they can plan better.”
Shares have appreciated more than 469% during 2026 and exceeded 3,100% over the trailing twelve months. Such extraordinary gains create elevated market expectations.
When a stock commands such premium valuations, meeting expectations proves insufficient. Following the latest announcement, SanDisk maintains $15.5 billion in remaining share repurchase authorization.
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