Memory chip leader SanDisk Corp. (NASDAQ: SNDK) reported a surprisingly strong performance for its last fiscal quarter, but its current quarter's growth outlook fell short of Wall Street's elevated expectations.
On Wednesday after the U.S. market close, SanDisk announced that for its fourth fiscal quarter ended June 30, 2026, revenue surged 372% year-over-year to $8.97 billion, exceeding market forecasts by 4.3%. Adjusted earnings per share (EPS) reached $39.25, a staggering 135 times the $0.29 reported a year ago, and beat analyst estimates by more than 10%.
Driven by storage demand, pricing, and its data center business, SanDisk's profitability improved significantly in the fourth quarter. The adjusted gross margin hit 84.6%, more than triple the figure from a year earlier and above the market's expectation of 81.5%.
For the entire fiscal year 2026, SanDisk generated $20.25 billion in revenue, a 175% increase from the prior year. This highlights the substantial impact of the current NAND upcycle and AI-related infrastructure demand on the company's revenue scale. SanDisk's management stated that by the end of fiscal 2026, the company has established a "leading technology portfolio" and has solidified the data center business as a key growth pillar.
Simultaneously, SanDisk's board approved a new $14 billion stock buyback program, bringing the total remaining repurchase authorization to $15.5 billion. For SanDisk, which experienced a sharp valuation decline following a July sell-off, this massive buyback is a significant signal of management confidence and provides potential support for the stock price.
However, despite the strong results, the stock price did not recover after the earnings release. SanDisk's shares, which had already fallen 5.4% in regular trading on Wednesday, extended their decline in after-hours trading, with the drop widening to as much as 8%.
Analysts suggest the primary reason for the sharp sell-off is not the fourth-quarter results themselves, but the company's revenue guidance for the current quarter, which came in below market expectations. The adjusted EPS guidance range was roughly in line with forecasts. As a major beneficiary of AI storage deals, the market holds exceptionally high growth expectations for SanDisk. The stock's reaction indicates that a "beat on the past" was not enough to fully offset a "slight miss on the future."
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