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Lately, surging artificial intelligence (AI) and data center demand has benefited both NVIDIA Corporation (NVDA - Free Report) and the much smaller Sandisk Corporation (SNDK - Free Report) . While the two companies offer different ways to capitalize on the AI boom, which one stands out to be the better buy now? Let’s explore –
Sandisk’s AI-Driven Growth Boosts Revenues and Profitability
Total revenues for Sandisk reached $8.97 billion in the fiscal fourth quarter of 2026, up a whopping 372% year over year and 51% sequentially, according to the company’s Aug. 5 press release.
For fiscal year 2026, revenues reached $20.25 billion, representing 175% year-over-year growth. The Data Center segment has been the major growth driver, with revenues jumping 437% as AI and data center demand increased the need for high-value storage.
In the fourth fiscal quarter, revenue growth came more from higher pricing than higher volumes. As a result, gross margins rose to 84.6% compared to 26.2% a year ago.
For fiscal year 2026, gross margin was 71.5% compared to 30.1% a year earlier. Profitability also improved dramatically, with GAAP net income coming in at $11.43 billion versus a loss of $1.64 billion in the previous year.
The growth doesn’t seem to be temporary, as management remains bullish on their near-term outlook. They expect revenues to be between $10.3 billion and $10.8 billion in the fiscal first quarter of 2027, which would mean another strong quarterly growth following a huge fiscal fourth quarter. Now that the company has signed five more New Business Model agreements, revenue growth and profitability will surely improve.
NVIDIA’s AI Demand Drives Strong Growth and Margin Expansion
The Data Center segment remains NVIDIA’s primary growth engine, with revenues jumping 117% year over year and 18% sequentially to $89 billion in the fiscal second quarter of 2027, according to the Aug. 26 press release. Consolidated revenues soared to $96.2 billion, up 106% year over year and 18% sequentially.
NVIDIA’s non-GAAP gross margin increased to 75% in the fiscal second quarter compared with 72.5% a year ago. Strong operating performance helped NVIDIA convert robust revenue growth into solid earnings growth.
NVIDIA further expects profitability to remain strong and projects revenues of $108 billion, plus or minus 2%, in the fiscal third quarter of 2027. At the midpoint, this would represent a 12% sequential rise. Additionally, the next-generation Vera Rubin platform has entered the full production stage, positioning NVIDIA to benefit from the next phase of AI infrastructure investment.
Sandisk or NVIDIA: Only One AI Stock to Buy Now
Both Sandisk and NVIDIA have delivered exceptional earnings growth, fueled by an increase in AI and data center demand, resulting in sharp revenue gains and substantial margin expansion. Both companies also look quite confident about their near-term outlooks.
However, Sandisk is in a highly cyclical memory business. If supply catches up with demand, memory prices may come under pressure and weigh on margins. Moreover, the company’s fast-paced growth has raised expectations, which has made its growth trajectory susceptible if pricing momentum weakens.
Since Sandisk’s business is dependent on storage demand, it has created greater concentration risk. In contrast, NVIDIA is capitalizing on the broader AI ecosystem, has dominant data center exposure, and continues to deliver exceptional AI-driven growth. To top it off, NVIDIA’s 63.7% net profit margin compared with Sandisk’s 56.5%, indicates its greater efficiency in converting revenues into bottom-line profits.
Image Source: Zacks Investment Research
Taken together, these factors make NVIDIA a better buy than Sandisk at the moment. NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Sandisk has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.
View the Zacks #1 Rank List
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Sandisk vs. NVIDIA: Which AI Stock Is the Better Buy Now?
Key Takeaways
Lately, surging artificial intelligence (AI) and data center demand has benefited both NVIDIA Corporation (NVDA - Free Report) and the much smaller Sandisk Corporation (SNDK - Free Report) . While the two companies offer different ways to capitalize on the AI boom, which one stands out to be the better buy now? Let’s explore –
Sandisk’s AI-Driven Growth Boosts Revenues and Profitability
Total revenues for Sandisk reached $8.97 billion in the fiscal fourth quarter of 2026, up a whopping 372% year over year and 51% sequentially, according to the company’s Aug. 5 press release.
For fiscal year 2026, revenues reached $20.25 billion, representing 175% year-over-year growth. The Data Center segment has been the major growth driver, with revenues jumping 437% as AI and data center demand increased the need for high-value storage.
In the fourth fiscal quarter, revenue growth came more from higher pricing than higher volumes. As a result, gross margins rose to 84.6% compared to 26.2% a year ago.
For fiscal year 2026, gross margin was 71.5% compared to 30.1% a year earlier. Profitability also improved dramatically, with GAAP net income coming in at $11.43 billion versus a loss of $1.64 billion in the previous year.
The growth doesn’t seem to be temporary, as management remains bullish on their near-term outlook. They expect revenues to be between $10.3 billion and $10.8 billion in the fiscal first quarter of 2027, which would mean another strong quarterly growth following a huge fiscal fourth quarter. Now that the company has signed five more New Business Model agreements, revenue growth and profitability will surely improve.
NVIDIA’s AI Demand Drives Strong Growth and Margin Expansion
The Data Center segment remains NVIDIA’s primary growth engine, with revenues jumping 117% year over year and 18% sequentially to $89 billion in the fiscal second quarter of 2027, according to the Aug. 26 press release. Consolidated revenues soared to $96.2 billion, up 106% year over year and 18% sequentially.
NVIDIA’s non-GAAP gross margin increased to 75% in the fiscal second quarter compared with 72.5% a year ago. Strong operating performance helped NVIDIA convert robust revenue growth into solid earnings growth.
NVIDIA further expects profitability to remain strong and projects revenues of $108 billion, plus or minus 2%, in the fiscal third quarter of 2027. At the midpoint, this would represent a 12% sequential rise. Additionally, the next-generation Vera Rubin platform has entered the full production stage, positioning NVIDIA to benefit from the next phase of AI infrastructure investment.
Sandisk or NVIDIA: Only One AI Stock to Buy Now
Both Sandisk and NVIDIA have delivered exceptional earnings growth, fueled by an increase in AI and data center demand, resulting in sharp revenue gains and substantial margin expansion. Both companies also look quite confident about their near-term outlooks.
However, Sandisk is in a highly cyclical memory business. If supply catches up with demand, memory prices may come under pressure and weigh on margins. Moreover, the company’s fast-paced growth has raised expectations, which has made its growth trajectory susceptible if pricing momentum weakens.
Since Sandisk’s business is dependent on storage demand, it has created greater concentration risk. In contrast, NVIDIA is capitalizing on the broader AI ecosystem, has dominant data center exposure, and continues to deliver exceptional AI-driven growth. To top it off, NVIDIA’s 63.7% net profit margin compared with Sandisk’s 56.5%, indicates its greater efficiency in converting revenues into bottom-line profits.
Image Source: Zacks Investment Research
Taken together, these factors make NVIDIA a better buy than Sandisk at the moment. NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Sandisk has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.