Sandisk logged a sharp gain in its stock price on Friday following a forecast that placed fiscal third-quarter revenue and adjusted earnings substantially above consensus estimates and news of an extended supply agreement for flash memory. Shares were last up 14.7% at $616.5, adding to a roughly 160% advance in January that positioned the company among the top performers on the S&P 500.
The company set guidance for fiscal third-quarter revenue in a range of $4.4 billion to $4.8 billion and projected adjusted earnings between $12 and $14 per share. The midpoints of those ranges sit higher than analysts' estimates, which LSEG data showed at $2.77 billion for revenue and $4.37 per share for adjusted profit.
Investment-bank commentary highlighted the significance of the forecast. Morgan Stanley analysts said that the results are "above the long-term trend," and based on their data points they judged it "likely to stay that way for more than one year - really for as long as the AI trajectory remains this robust."
Peers in the memory and storage sector have also seen strong share-price moves. Western Digital, Seagate Technology and Micron Technology have posted robust gains recently, reflecting the broader market reaction to heightened AI-related demand. Western Digital also issued a third-quarter revenue forecast ahead of expectations, although its shares traded down 5.5% on the day.
Industrywide, manufacturers are coping with an acute global shortage of memory chips. The tightness in supply has multiple effects: it creates competition among AI and consumer-electronics companies for limited components, it supports a backlog of orders expected to last multiple years, and it underpins expectations for sustained growth among suppliers. Morningstar analysts anticipate those supply constraints will persist until at least 2028, a dynamic that could produce considerable growth potential for Sandisk.
Sandisk reported second-quarter results that already exceeded estimates, with sales of $3.03 billion and adjusted earnings of $6.2 per share. The company also took steps to secure its flash-chip access by relying on a joint venture with Kioxia Corp in Japan. Sandisk and Kioxia extended their supply agreement to run through the end of 2034, replacing the previous expiration at the end of 2029.
The stronger outlook and supply extension prompted at least five brokerages to lift their price targets on Sandisk stock. Among these revisions, Bernstein put a $1,000 price target on the shares, one of the highest on Wall Street.
Context and market implications
The combination of demand driven by AI workloads and a secured long-term supply arrangement positions Sandisk to capitalize on elevated storage needs, while the broader memory-chip shortage is reshaping competitive dynamics across data-center and consumer-electronics supply chains.