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Sandisk Stock Rides on Datacenter Growth: A Sign of More Upside?
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Key Takeaways
SNDK posted 26% sequential datacenter revenue growth in Q1 fiscal 2026, driven by strong Stargate SSD demand.
SNDK's BiCS8 tech is set to become the majority of bit production exiting FY26.
SNDK guides Q2 fiscal 2026 revenue of $2.55-$2.65B on double-digit price hikes.
Sandisk (SNDK - Free Report) is riding on strong datacenter revenue growth, which increased 26% sequentially in the first quarter of fiscal 2026, driven by strong demand for the “Stargate” product line. Growing interest in the company’s technology from global hyperscalers, neocloud and OEM customers is noteworthy. Stargate — SNDK’s storage-focused SSD product line — is expected to gain traction among these customers.
Meanwhile, Sandisk’s BiCS8 technology accounted for 15% of total bits shipped and is expected to reach the majority of bit production exiting fiscal 2026. Rapid growth of AI is creating a strong tailwind for SNDK’s high-capacity, power-efficient SSDs enabled by the BiCS8 technology. Investments in data centers and AI infrastructure are expected to surpass $1 trillion by 2030, which bodes well for Sandisk’s prospects.
For the second quarter of fiscal 2026, Sandisk expects revenues between $2.55 billion and $2.65 billion, driven by double-digit price increases and mid-single-digit bit growth. SNDK expects non-GAAP operating expenses between $450 million and $475 million, primarily to support data center business expansion and high-bandwidth flash innovation. The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is currently pegged at $2.62 billion.
SNDK Faces Tough Competition in the Datacenter & AI Space
Sandisk competes against Dell Technologies (DELL - Free Report) and Micron Technology (MU - Free Report) in the datacenter and AI space.
In the third quarter of fiscal 2026, Dell Technologies’ AI-optimized server momentum saw an increase of $12.3 billion in orders and $30 billion of orders year to date. DELL shipped $5.6 billion worth of AI servers in the fiscal third quarter, and the AI server backlog remained healthy at $18.4 billion. Dell Technologies’ focus on AI infrastructure has positioned it as a leader in the market. DELL expects to ship approximately $9.4 billion worth of AI servers in the fiscal fourth quarter of 2026. Its AI server shipments are expected to reach $25 billion for fiscal 2026, indicating remarkable 150% year-over-year growth.
Micron is capitalizing on the AI boom with its HBM3E solutions, which are increasingly being adopted by major hyperscalers and enterprise customers. On the first-quarter fiscal 2026 earnings call, the company highlighted strong customer interest in its HBM3E portfolio, which is expected to drive substantial revenue growth in the quarters ahead. Micron’s HBM portfolio is generating multi-billion-dollar quarterly revenues. MU is poised to be the key beneficiary of surging AI-related infrastructure spending, as companies continue to build out GPU clusters and AI data centers that require advanced memory solutions.
Sandisk shares have appreciated 418.3% in the trailing six-month period, outperforming the broader Zacks Computer and Technology sector’s return of 21.1%.
SNDK Stock Outperforms Sector
Image Source: Zacks Investment Research
The SNDK stock is trading at a premium, with a forward 12-month price/sales of 3.05X compared with the Zacks Computer-Storage Devices’ 1.81X. Sandisk has a Value Score of D.
SNDK Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $12.59 per share, up 3.2% over the past 30 days. Sandisk reported earnings of $2.99 per share in fiscal 2025.
Image: Bigstock
Sandisk Stock Rides on Datacenter Growth: A Sign of More Upside?
Key Takeaways
Sandisk (SNDK - Free Report) is riding on strong datacenter revenue growth, which increased 26% sequentially in the first quarter of fiscal 2026, driven by strong demand for the “Stargate” product line. Growing interest in the company’s technology from global hyperscalers, neocloud and OEM customers is noteworthy. Stargate — SNDK’s storage-focused SSD product line — is expected to gain traction among these customers.
Meanwhile, Sandisk’s BiCS8 technology accounted for 15% of total bits shipped and is expected to reach the majority of bit production exiting fiscal 2026. Rapid growth of AI is creating a strong tailwind for SNDK’s high-capacity, power-efficient SSDs enabled by the BiCS8 technology. Investments in data centers and AI infrastructure are expected to surpass $1 trillion by 2030, which bodes well for Sandisk’s prospects.
For the second quarter of fiscal 2026, Sandisk expects revenues between $2.55 billion and $2.65 billion, driven by double-digit price increases and mid-single-digit bit growth. SNDK expects non-GAAP operating expenses between $450 million and $475 million, primarily to support data center business expansion and high-bandwidth flash innovation. The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is currently pegged at $2.62 billion.
SNDK Faces Tough Competition in the Datacenter & AI Space
Sandisk competes against Dell Technologies (DELL - Free Report) and Micron Technology (MU - Free Report) in the datacenter and AI space.
In the third quarter of fiscal 2026, Dell Technologies’ AI-optimized server momentum saw an increase of $12.3 billion in orders and $30 billion of orders year to date. DELL shipped $5.6 billion worth of AI servers in the fiscal third quarter, and the AI server backlog remained healthy at $18.4 billion. Dell Technologies’ focus on AI infrastructure has positioned it as a leader in the market. DELL expects to ship approximately $9.4 billion worth of AI servers in the fiscal fourth quarter of 2026. Its AI server shipments are expected to reach $25 billion for fiscal 2026, indicating remarkable 150% year-over-year growth.
Micron is capitalizing on the AI boom with its HBM3E solutions, which are increasingly being adopted by major hyperscalers and enterprise customers. On the first-quarter fiscal 2026 earnings call, the company highlighted strong customer interest in its HBM3E portfolio, which is expected to drive substantial revenue growth in the quarters ahead. Micron’s HBM portfolio is generating multi-billion-dollar quarterly revenues. MU is poised to be the key beneficiary of surging AI-related infrastructure spending, as companies continue to build out GPU clusters and AI data centers that require advanced memory solutions.
SNDK’s Share Price Performance, Valuation & Estimates
Sandisk shares have appreciated 418.3% in the trailing six-month period, outperforming the broader Zacks Computer and Technology sector’s return of 21.1%.
SNDK Stock Outperforms Sector
Image Source: Zacks Investment Research
The SNDK stock is trading at a premium, with a forward 12-month price/sales of 3.05X compared with the Zacks Computer-Storage Devices’ 1.81X. Sandisk has a Value Score of D.
SNDK Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $12.59 per share, up 3.2% over the past 30 days. Sandisk reported earnings of $2.99 per share in fiscal 2025.
Sandisk Corporation Price and Consensus
Sandisk Corporation price-consensus-chart | Sandisk Corporation Quote
Sandisk currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.