Aug 5 - Sandisk said it expects first-quarter revenue to come in above consensus estimates, as demand for the company's memory products used in AI data centers continues to accelerate. The Milpitas, California-based memory maker set a revenue range and provided profit guidance that surpasses analyst projections, but its shares moved lower in extended trading despite a sizable year-to-date gain.
Guidance and market reaction
The company forecast first-quarter revenue between $10.30 billion and $10.80 billion, with the midpoint exceeding the average analyst estimate of $10.47 billion, according to data compiled by LSEG. Sandisk also gave a quarterly adjusted profit outlook of $44 to $46 per share, above the consensus of $43.12.
Following the announcement, Sandisk's stock dropped more than 3% in after-hours trading. That move came after the shares had already climbed more than five-fold year-to-date amid a broader rally in memory and storage stocks, driven by higher chip prices and optimism about AI-driven demand.
Operational performance and client wins
Sandisk said generative AI's fast expansion is increasing demand for its enterprise solid-state drives (SSDs) and flash memory chips, as data centers need additional storage and compute capacity. The company reported that its data-center revenue in the fourth quarter more than doubled from the third quarter to $2.98 billion, a development the company said capped a strong year since separating from Western Digital in early 2025.
For the fourth quarter, Sandisk posted revenue of $8.97 billion, topping estimates of $8.39 billion. Adjusted earnings were $39.25 per share, above expectations of $34.45. Since April, the company said it has signed five additional agreements under its new business model, including three with new customers and two expansions of existing arrangements.
Capital allocation
The board approved an additional $14 billion share-repurchase program, which raises the company's total remaining buyback authorization to $15.5 billion.
Summary
Sandisk's guidance for the coming quarter and its recent quarterly results point to continued strength in demand for storage solutions tied to generative AI and data-center expansion. The company reported sizable sequential gains in data-center revenue, continued to secure new and expanded customer agreements under a revised commercial approach, and pursued an aggressive share buyback plan. Nonetheless, the stock's after-hours decline highlights ongoing market sensitivity to corporate announcements even when results and forward guidance beat expectations.
Key points
- Revenue guidance for the first quarter is $10.30 billion to $10.80 billion, with the midpoint above analysts' average estimate.
- Quarterly adjusted EPS guidance is $44 to $46, exceeding the consensus of $43.12.
- Rapid growth in generative AI demand is lifting sales of enterprise SSDs and flash chips, and the company's fourth-quarter data-center revenue doubled sequentially to $2.98 billion.
Sectors impacted: Semiconductors, storage solutions, and data-center infrastructure.
Risks and uncertainties
- Share-price volatility - The stock fell more than 3% in after-hours trading despite strong guidance and gains earlier in the year, indicating market sensitivity to earnings and guidance announcements.
- Concentration on AI-driven demand - The company's outlook and recent revenue gains rely heavily on continued growth in generative AI workloads and the associated need for storage and compute capacity.
- Execution of new commercial model - Growth is supported by five agreements signed since April under a revised business model; the pace and durability of such deal flow are uncertain.
Note: The information presented here reflects the company's guidance, reported quarterly results, announced deals, and share-repurchase approvals as disclosed by the company.