Sandisk stock sinks as revenue forecast falls short of expectations

What happened: Sandisk (SNDK) stock sank as much as 8% in after-hours trading on Wednesday.

What’s behind the move: The flash memory and storage manufacturer issued revenue guidance for the company’s fiscal first quarter that came in below analyst expectations.

The company expects its fiscal Q1 revenue to be between $10.3 billion and $10.8 billion, versus estimates of $11.16 billion. While gross margin reached a record 84.6% last quarter, the company’s guidance for 2027 calls for a range of 83% to 85%.

Sandisk posted fiscal fourth quarter revenue of $8.79 billion, beating Wall Street consensus estimates of $8.64 billion. The company said that revenue growth came from approximately one-third higher volumes and two-thirds higher pricing.

Management noted that demand from its customers is outpacing supply and, as a result, expects bits to remain on allocation beyond calendar year 2027. In other words, the company will continue rationing its memory supply among its customers.

Management has leaned into long-term new-business model agreements since April’s earnings call, including three with new customers and two expansions of existing deals, reflecting long-term demand. Contracts last up to five years, with an average duration of more than four years.

“The total expected revenue from all our NBMs we have signed is a minimum of $93.9 billion, assuming floor pricing. We believe actual revenue will be above that minimum.” said SanDisk CFO Luis Visoso.

Pricing of the company’s non-NBM business will fluctuate with the market.

What else you need to know: SanDisk’s adjusted earnings per share of $39.25 topped estimates of $34.37. The company’s forecast for adjusted earnings per share for the current quarter was between $44 and $46, versus estimates of $45.58.

Sandisk, which spun off from Western Digital (WDC) in February 2025, has been one of the stock market’s biggest winners this year as memory and storage have emerged as key bottlenecks in the AI infrastructure build-out.

Earlier this week, Sandisk shares jumped after the company, in collaboration with memory maker SK Hynix (SKHY), released a new hardware blueprint designed to make AI chips faster and cheaper to run. By creating a shared standard for high-speed memory, the partnership aims to reduce data center costs and accelerate the rollout of advanced AI apps.

The stock is up nearly 490% year to date and has been the best performer in the S&P 500 (^GSPC) since the start of 2026.

Wall Street has 25 Buy ratings on the stock, 5 Holds, and no Sells, with the average price target just north of $2,400.