SanDisk Earnings Crush Estimates With 251% Revenue Surge

Key Points

• SanDisk's fiscal Q3 2026 revenue of $5.95 billion rose 251% year over year, easily topping the $4.55 billion consensus estimate.
• The company signed five multi-year customer agreements, with over a third of fiscal 2027 bit supply already contracted, providing durable revenue visibility.
• Despite guiding fiscal Q4 revenue of $7.75 billion to $8.25 billion, well above consensus, SNDK shares declined modestly in after-hours trading.

Sandisk NASDAQ: SNDK has been one of the most remarkable stories in the entire market over the past year. Heading into its fiscal Q3 2026 earnings report on April 30, the stock had already surged close to 360% year to date and over 3,300% in the past year. This run made it one of the most extraordinary performers in the entire market over that stretch. And the thesis driving that move has, of course, been AI-related.

The AI data center buildout is creating massive, structural demand for enterprise NAND flash storage, and SanDisk sits at the center of it. For the third consecutive quarter, the results sharply topped estimates as the memory shortage and supply crunch continue.

The Quarter Was Extraordinary

Sandisk's fiscal Q3 results were, without exaggeration, one of the strongest earnings reports of this earnings season. Revenue came in at $5.95 billion, up 251% year over year and up 97% sequentially.

The results crushed the consensus estimate of $4.55 billion and blew past the high end of management's own guidance range of $4.4 billion to $4.8 billion. Non-GAAP EPS of $23.41 beat the $14.36 consensus by 63%, up dramatically from $6.20 in the prior quarter and a complete reversal from a small loss in the same quarter a year ago.

The margin story was equally compelling and impressive. GAAP gross margin expanded to 78.4%, up from just 22.5% a year earlier, a 55.9 percentage point improvement in 12 months. Non-GAAP operating margin reached 70.9%, up from 37.5% sequentially. The company ended the quarter with $3.73 billion in cash and a zero-debt balance sheet, having fully repaid its term loan. Management capped the quarter by announcing a $6 billion share buyback authorization.

The segment driving it all was Datacenter. Revenue in that segment surged 233% sequentially and 645% year over year to $1.46 billion, led by TLC products and early readiness for the upcoming QLC Stargate launch. The Edge segment, which includes client and mobile applications, more than doubled sequentially to $3.66 billion, up 295% year over year. Consumer revenue grew 44% year over year to $820 million.

A New Business Model Built for Durability

Beyond the headline numbers, the most strategically significant development from the earnings call was the progress on Sandisk's New Business Model. The company ended Q3 with three signed multi-year agreements in place, and revealed it has signed two additional agreements in the fiscal fourth quarter. Collectively, these contracts are backed by firm financial commitments from customers, providing revenue visibility and earnings durability that the prior spot-market-driven model could never offer.

Over a third of fiscal 2027 bit supply is already contracted under these arrangements. CEO David Goeckeler described the quarter as a fundamental inflection point, where technology leadership is enabling a deliberate shift toward the highest-value end markets, backed by a model built for structurally higher and more durable earnings power. The numbers make that case without much further argument.

The Guidance Is Equally Impressive

If the Q3 results were exceptional, the Q4 guidance provided was right up there, too. Management guided fiscal Q4 revenue of $7.75 billion to $8.25 billion, against a prior consensus of $6.49 billion. Non-GAAP EPS guidance was $30 to $33 compared to a prior consensus of approximately $22.70. Non-GAAP gross margin guidance of 79% to 81% implied further expansion from Q3's already elevated levels.

The Selloff and the Technical Setup

Despite all that, the stock fell in after-hours trading following the release. Heading into earnings, SNDK had already priced in significant optimism, hitting a fresh all-time high during the intraday session. After a parabolic run of that magnitude over the prior 12 months, even a report that crushes every metric can trigger profit-taking. Especially in the case of SNDK, which was extended from its medium-term key simple moving averages, and up almost 73% in April.

From a technical perspective, the more interesting question now is what the stock does next. After such an extraordinary run, some digestion and consolidation would be entirely healthy. A period of base-building above the rising 20-day SMA, allowing the stock to work off its overbought condition while the fundamental story continues to develop, could set up a constructive platform for the next leg.