Sandisk Corp. (NASDAQ:SNDK) rallied 20.1% last week, extending gains as upbeat guidance and strengthening demand in the NAND flash market lifted investor sentiment. The surge came after the company’s management struck a confident tone during its latest earnings call, highlighting growing opportunities tied to artificial intelligence (AI) and data center expansion.
AI-driven demand boosts NAND market outlook
Sandisk CEO David Goeckeler said that rising global investments in AI infrastructure and data centers are creating “a strong tailwind” for the company’s high-capacity, power-efficient solid-state drives (SSDs). The company projects second-quarter revenue between $2.55 billion and $2.65 billion, with diluted earnings per share expected in the range of $3.00 to $3.40.
The upbeat guidance follows a mixed set of quarterly results, where Sandisk reported revenue of $2.31 billion in the first quarter of fiscal 2026—up 23% year-on-year from $1.88 billion—but a 47% decline in net income to $112 million from $211 million a year earlier. Despite the earnings drop, investors focused on the company’s robust sales momentum and improving margins as early signs of recovery in the NAND segment.
Strategic shift post-Western Digital separation
Sandisk’s performance comes amid its ongoing transition following separation from Western Digital (WDC). The company highlighted “ahead-of-plan progress” toward achieving a net cash-positive position and emphasized sustained strength in both data center and consumer demand. WDC shares also gained 6.9% in parallel with SNDK’s rally, reflecting renewed investor interest in the flash memory space.
Investor outlook: optimism tempered by valuation risks
While SanDisk’s improved outlook has re-energized bullish sentiment, analysts caution that its elevated valuation and management reshuffle could pose medium-term risks. The company’s ambitious technology roadmap and expectations for profitability within three years hinge on execution amid persistent supply constraints and fluctuating memory prices.
Still, with the NAND market showing signs of cyclical recovery and AI-related demand intensifying, Sandisk’s near-term momentum remains strong. Investors will be watching closely to see whether management can sustain this growth trajectory and translate operational progress into consistent profitability through 2026.
