Sandisk (SNDK) Tops Fiscal Q1 Estimates as Data Center Sales Jump 61%

Sandisk (SNDK) reported fiscal first-quarter revenue of $11.03 billion, up 378% year on year and 23% from the previous quarter, beating the $10.69 billion Zacks consensus. Adjusted earnings of $49.51 a share topped the Zacks estimate of $47. The shares plunged 9.4% to $1,205.13 as of 9:31 a.m. ET on Friday, the first session after the results came out following Thursday’s close.

The stock was already under pressure before the report. It fell 5.3% on Thursday to close at $1,330.05.

What stood out

Data centers did most of the work. Revenue from that unit, which sells flash storage to cloud and AI customers, rose 61% from the previous quarter to $4.80 billion, the release showed.

Edge revenue, from storage built into devices such as PCs, phones, and cars, rose 7% to about $5.8 billion. Consumer revenue, from memory cards and drives sold in stores, fell 29% to $397 million, which management tied to buyers adjusting to higher prices, according to the call. “We have started fiscal year 2027 with another quarter of strong performance, with robust and growing demand for our products driving outpaced growth in our data center business,” Chairman and Chief Executive David Goeckeler said in the release.

Pricing kept margins near record levels. The adjusted gross margin, the share of sales left after production costs, reached 85.1%, above the 83% to 85% range Sandisk had guided. The company also bought back about 3.2 million shares for $5.0 billion during the quarter.

The outlook

Sandisk expects fiscal second-quarter revenue of $12.2 billion to $12.6 billion. The $12.4 billion midpoint would be about 12% above this quarter, slower than the 23% jump just reported. It forecast adjusted earnings of $55 to $57 a share before the split and an adjusted gross margin of 84.5% to 85.5%, a midpoint slightly below this quarter’s level.

The board approved an eight-for-one stock split. Holders of record on 9 November get seven extra shares for each one they own, effective 19 November.

The stock’s reaction

We could not find a single cause for the drop reported by two major outlets. Memory stocks fell together on Friday: Micron (MU) was down 5.7% as of 9:31 a.m. ET.

As of Thursday’s close, the stock was up 460.3% this year and sat 43.0% below its 52-week closing high of $2,335.00 from 25 June.

Our take

This was a clean beat with higher guidance, led by data center demand. Next quarter we’d watch whether data center growth keeps outrunning the slower overall guide, and whether consumer sales keep shrinking as prices rise.