Sandisk Corporation SNDK is benefiting from a structural shift in enterprise solid-state drive demand as AI workloads redefine storage priorities inside data centers. Customers are no longer optimizing only for cost per gigabyte. AI inference and large-scale data processing require low latency, higher throughput and dependable endurance. This evolution shifts competition away from pure pricing toward performance capability. For Sandisk, this transition is strengthening pricing power while deepening relationships with hyperscalers and enterprise customers building AI infrastructure at scale.
Data center revenues increased 76% year over year to $440 million in the fiscal second quarter. Non-GAAP gross margin expanded to 51.1% from 32.5% in the prior-year period, reflecting improved mix and stronger enterprise pricing. Sandisk has qualified its fifth-generation PCIe triple-level cell drives with multiple hyperscalers, reinforcing its ability to meet stringent AI performance requirements. The BiCS8 platform further extends this positioning by supporting both compute-focused drives and higher-capacity offerings, allowing the company to address varied AI deployment models.
SNDK expects fiscal third-quarter revenues between $4.40 billion and $4.80 billion, with projected non-GAAP gross margins of 65% to 67%. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $14.13 billion, up 92.11% year over year. As data centers emerge as the largest NAND market and enterprise solid-state drive demand accelerates alongside AI infrastructure investments, Sandisk's technology positioning and expanding hyperscaler relationships suggest its AI-linked growth trajectory may indeed signal further upside.
How SNDK Stacks Up Against Storage Rivals
Sandisk's AI storage growth is unfolding alongside different competitive dynamics at rival storage players. Micron Technology MU is similarly pursuing enterprise solid-state drive opportunities within AI datacenters, with Micron Technology accelerating hyperscaler qualifications. However, Micron Technology maintains broader revenue diversification across DRAM and NAND segments, diluting its pure-play exposure to enterprise storage margin expansion that Sandisk is capturing. Seagate Technology Holdings plc STX operates in a different category, remaining primarily focused on hard disk drives for capacity storage. Seagate Technology faces headwinds as performance-critical AI workloads shift toward solid-state solutions, though Seagate Technology retains positioning in cold storage applications where cost per terabyte still matters more than speed.
SNDK’s Share Price Performance, Valuation & Estimates
Sandisk shares have appreciated 1276.4% in the trailing six-month period, outperforming the broader Zacks Computer and Technology sector’s return of 7.8%.
SNDK Stock Outperforms Sector
Image Source: Zacks Investment Research
The SNDK stock is trading at a forward 12-month price/sales of 4.31X compared with the Zacks Computer-Storage Devices’ 2.42X. Sandisk has a Value Score of F.
SNDK Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $27.2 per share, up by 102.1% 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.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
