Core Insights - Sandisk Corp. (SNDK) is experiencing significant growth, reporting a 61% year-over-year revenue increase to $3.03 billion in Q2 FY26, driven by strong demand from AI infrastructure builders and improved pricing across all markets [2][9] - Earnings per share reached $6.20, a substantial rise from $1.23 a year ago, exceeding Zacks Consensus Estimate by 75.14% [2][9] Revenue Growth - Datacenter revenues surged 76% year-over-year, fueled by the adoption of AI computing and high-performance enterprise solid-state drives [4][9] - Edge revenues increased by 63.2% year-over-year, reflecting higher storage requirements for AI-enabled personal computers and mobile devices [5] - Consumer revenues grew 51.7% year-over-year, supported by premium product innovations and strategic partnerships [5] Product Development - Sandisk's BiCS8 quad-level cell storage product is advancing through qualification with major hyperscalers, expected to generate revenue soon [6] - The extended joint venture with Kioxia Corporation until December 2034 strengthens Sandisk's competitive position against peers like Western Digital Corp., Seagate Technology Holdings, and Micron Technology Inc. [6] Future Guidance - For Q3 FY26, Sandisk expects revenues between $4.4 billion and $4.8 billion, indicating a substantial sequential increase [7] - Projected gross margins are expected to expand to 65-67%, with earnings per share guidance of $12 to $14, reflecting sustained pricing strength and improved product mix [7] Estimate Revisions - Sandisk has an expected revenue growth rate of 92.1% and earnings growth rate of over 100% for the current year, with Zacks Consensus Estimate for earnings improving by 57.2% in the last week [8] - For the next year, expected revenue and earnings growth rates are 82.1% and over 100%, respectively, with earnings estimates improving by 34.4% recently [8] Stock Performance - The short-term average price target for Sandisk stock indicates a potential increase of 10.4% from the last closing price of $597.95, with a maximum upside of 66.7% and a downside of 61.5% [10] - Sandisk is currently trading at a 21.3% discount to its 52-week high, positioning it as a strong buy opportunity [11]
Buy SNDK for Double-Digit Returns in the Short Term After a Solid 2025