Sandisk, a Zacks Rank #1 (Strong Buy), is a developer and manufacturer of data storage devices and solutions. The company operates at the heart of the memory bottleneck that AI infrastructure has created.

The stock is displaying relative outperformance and has been making a series of 52-week highs. The price movement is a sign of strength as we head further into the new year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.

Sandisk is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 8% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has throughout the past year:

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Stocks in this group are relatively undervalued and are also expected to experience above-average earnings growth, signifying a powerful foundation that should lead to higher prices. Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.

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And the industry's tailwinds are just getting started. The primary catalyst has been explosive growth in artificial intelligence workloads, which require massive amounts of high-capacity, high-performance storage for training, inference, and archival purposes.

AI-powered storage markets are exploding—from $30.27 billion in 2025 to a projected $187.61 billion by 2035 at a 20% compounded annual growth rate (CAGR). We're talking edge AI for autonomous cars, cloud refreshes for LLMs, and cybersecurity-driven backups.

Company Description

Sandisk specializes in NAND flash-memory storage solutions such as solid-state drives (SSDs) for desktop and notebook PCs, gaming consoles, and set top boxes, as well as other flash-based embedded storage products for mobile phones, tablets, and other portable devices. NAND flash memory is not only the primary storage technology for SSDs, USBs, and SD cards, but also for data center storage. The company’s solutions extend to automotive, industrial, data center, and cloud applications.

Data center operators and hyperscalers continue to expand infrastructure at an unprecedented pace, driving sustained demand for the company’s NAND flash-based memory solutions. A supply-demand imbalance in NAND flash memory has created a shortage, tightening availability across the market.

As a major producer, Sandisk benefits from stronger pricing power and improved margins when demand outstrips supply. The persistent NAND supply shortage is expected to continue well into 2027.

And the company’s recent announcements around partnerships (including with SK Hynix on High Bandwidth Flash standardization) demonstrate technological leadership and ecosystem strength. Sandisk’s cutting-edge BiCS8 QLC technology is seeing strong adoption in high-density enterprise SSDs and embedded storage for AI edge devices. These developments enhance Sandisk’s ability to win designs in next-generation AI systems.

Earnings Trends and Future Estimates

Sandisk has established an impressive reporting history, surpassing earnings estimates in each of the past four quarters. The company most recently delivered fiscal second-quarter earnings back in January of $6.20 per share, which marked a 75.1% surprise over the $3.54/share consensus estimate.

During the second quarter, Sandisk reported revenue of $3.03 billion, up 61% year-over-year and well above consensus expectations. Data center revenue surged 64% sequentially, driven by strong adoption among hyperscalers and AI infrastructure builders. Gross margins expanded dramatically to 51.1%, reflecting both pricing power and favorable product mix.

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These results were not isolated; they reflected the company’s successful transition into a higher-margin, AI-focused business following the spin-off. The AI memory powerhouse delivered a trailing four-quarter average earnings surprise of 371.3%, reflecting strong execution.

Analysts covering SNDK are in agreement and have raised their fiscal third-quarter estimates by 17.73% in the past 60 days. The Zacks Consensus Estimate now stands at $13.68/share, reflecting an astounding potential growth rate of 4,660% relative to same period in the prior year.

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It’s clear that analysts are modeling continued acceleration for the upcoming Q3 report. Consensus estimates call for revenue in the $4.5–$4.6 billion range, translating to a nearly 170% improvement. These figures represent enormous sequential and year-over-year growth, underscoring the momentum in Sandisk’s data center and enterprise segments.

What the Zacks Model Reveals

Our Zacks Earnings ESP (Expected Surprise Prediction) filter empowers investors by allowing them the opportunity to detect stocks that are most likely to beat consensus estimates. The Zacks Earnings ESP indicator seeks to identify companies that have recently witnessed positive earnings estimate revision activity.

The technique has proven to be quite useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.

Sandisk (SNDK Quick QuoteSNDK - Free Report) is currently a Zacks Rank #1 (Strong Buy) stock and boasts a +4.96% Earnings ESP. Another beat may be in the cards when the company reports its fiscal Q3 results after the market close on April 30^th.

Let’s Get Technical

This market leader has seen its stock advance over 300% already this year, all while the general market see-sawed between gains and losses. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.

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Notice how both the 50-day (black line) and 200-day (red line) moving averages are sloping up. With both strong fundamental and technical indicators, SNDK stock is poised to continue its outperformance.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Sandisk has recently witnessed positive revisions. As long as this trend remains intact (and SNDK continues to deliver earnings beats), the stock will likely continue its bullish run.

Bottom Line

The recent strength in Sandisk is rooted in a powerful combination of structural AI demand and an exceptionally tight NAND supply environment. The memory market is in a classic upcycle where demand for AI workloads is outstripping supply, and NAND flash is a critical component. Sandisk’s focus on high-density, high-performance solutions aligns directly with this trend.

The stock currently carries a Zacks Rank #1 (Strong Buy), reflecting consistent upward revisions to estimates and the company’s ability to exceed expectations. The Zacks Rank system rewards exactly this type of positive momentum, and Sandisk has been a standout in that regard.

For investors seeking exposure to the ongoing AI infrastructure buildout, Sandisk stands out as a high-conviction idea, offering a balanced risk/reward profile with tangible earnings momentum.