Key Points
Nvidia reports earnings -- and declares the AI revolution alive and well.
Samsung workers strike ends, and NAND production worries go away.
It's a good news, bad news kind of a day for Sandisk.
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Sandisk (NASDAQ: SNDK) stock jumped 6.2% through 10:05 a.m. ET this morning as investors weighed news items affecting the computer memory-maker -- both good and somewhat bad news.
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Good news for Nvidia is great news for Sandisk
On the good side of the ledger, Nvidia (NASDAQ: NVDA) reported monster earnings growth yesterday. Sales surged 85% year over year to a record quarterly haul of $81.6 billion. Fully 92% of this revenue came from chips sales to artificial intelligence data centers, proving the AI revolution is alive and well -- and so is the need for NAND flash memory from Sandisk.
What's more, profit margins on chip sales remain superb. Nvidia boasted of a 74.9% gross profit margin in its fiscal Q1 2027, more than tripling Nvidia's quarterly net profit to $58.3 billion ($2.39 per share). And here's the kicker for Sandisk investors:
It turns out Sandisk does even better on gross margin than Nvidia. Sandisk's gross margin last quarter was 78.4%!
Good news for Samsung is less good news for Sandisk
So that's the good news, now here's the bad (for Sandisk):
Over in South Korea, workers at Samsung Electronics just announced a halt to their 18-day labor strike. Union representatives have reached an agreement with management to more fairly share AI chip profits with workers, and the union will vote to approve the new contract over the next several days.
Assuming all goes well with the vote, the world's largest producer of DRAM and NAND computer memory will be back in business and running full speed, still competing head-to-head with Sandisk on price -- and now with happier workers on its payroll.
This isn't necessarily bad news for Sandisk, but all things considered, it would have probably preferred to see the strike last a bit longer.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
