SanDisk Price Outlook: Q4 Revenue $8.97B (+51% Seq), Data Center +437%, Chinese YMTC IPO Adds Competitive Risk

Q4 revenue of $8.97B (+51% seq from $5.95B Q3, +93% YoY from $4.66B). GAAP net income was $6.90B ($43.97 per share). Non-GAAP EPS was $39.25 (+17% YoY from $33.62). Management stated that about 2/3 of the $3.02B sequential growth — approximately $2.0B — was from pricing, and about 1/3 — approximately $1.0B — was from volume. Full FY2026 revenue was $20.25B (+175% YoY). GAAP net income for FY2026 was $11.43B. Strong NAND pricing has a significant positive impact on a company"s bottom-line. Barron"s stated the five largest NAND makers experienced 77% revenue growth in Q2 from the previous quarter, with demand from AI and a constrained supply environment.

SanDisk DC’s revenue increased by 437% YoY during FY2026. The demand for fast persistent storage used for models, vector databases, and KV-cache inference loads is boosted with the AI infrastructure boom. The smartphone and PC markets are declining, so DC intensity is making up for that. Barron's said that there was a NAND supply shortage during Q2 because of strong purchasing of AI-servers. With a structural increase in the amount of storage needed per data center(approximately equivalent to per GPU cost), there will be a multi-year tailwind from strong demand with minimal impact from the smartphone cycle.

SanDisk expects elevated NAND pricing and DC demand post-Q4, so they set a midpoint revenue estimate of $10.55B for Q1 FY2027, reflecting $10.30B-$10.80B (+18% sequentially from Q4's record $8.97B). Non-GAAP EPS is targeted at $44-$46. With strong pricing, continuous DC demand, and elevated NAND demand, strong revenue growth is anticipated for future years, projected in the 6-9% range. Excess cash after capital expenditure planned for distribution to shareholders at 100% of the value.

Ten structured NBM agreements, with five signed in Q4 and five prior, further consolidate SanDisk's customers' commitment to multi-year, and therefore, more predictable, volume purchases of NAND. The strategy is noteworthy, as NAND has been one of the most volatile segments of the semiconductor business. Longer deals may lock in the potential for more predictable earnings, but also may expose SanDisk to volume commitments at potentially less favorable pricing, should supply conditions deteriorate.

The board approved an additional $14B share buyback program, bringing the total available for buyback to approximately $15.5B. This authorization provides flexibility to SanDisk to pursue share buyback programs during market weakness. SanDisk is projecting an increase in free cash flow in fiscal 2026 of over $13B, which would support both aggressive capital expenditures and share buybacks. Recent share price volatility (a 35% rally followed by a 9% selloff Aug 18) has created an opportunity for SanDisk to buyback shares.

On August 12, SanDisk and Kioxia announced 2TB QLC 3D NAND based on CMOS bonded to the array. This is designed for AI and other data intensive workloads, and is claimed to have 75% higher bandwidth than TLC. It is also claimed to have 76% less chips and 75% smaller die size than previously available TLC and QLC. On August 3, SanDisk and Kioxia announced a QLC variant that doubles the bit density of the eighth generation, and supports a 4.8 Gb/s interface. On August 3, Open Compute Project released a specification for High Bandwidth Flash (HBF, SK Hynix partnership). This initiative is also designed to go beyond conventional SSDs, extend, and support the growing market for memory-intensive AI inference.

The parent of YMTC plans to raise $4.9 billion in the upcoming Shanghai IPO. Part of the funding is expected to be used for advanced NAND research and Fab construction. YMTC benefits from the same market conditions for NAND as SanDisk, including an AI-driven storage focus, and would create capital to push aggressively into advanced NAND. Darin expresses that the market gap for advanced NAND is likely to narrow, as U.S. restrictions on YMTC and efforts to limit Chinese memory suppliers likely create a U.S. market edge.

SNDK is trading at $1,493.12 (-6.45%). Volatility has been +35% through August 17 due to Investor Day, increased strength in NAND due to U.S. policy; -9% on August 18 due to selloff for increased financing and rate risks, and a return on investment; -6.45% on August 24.

SanDisk Price Chart - Source: Tradingview

RSI is 40 (suggesting losing buying momentum as SNDK fell through 43 into 50). Break Resistance at $1,508.87 and Support at $1,424.80, exposing $1,314.37. The Fib 50% $1,673.80 is the recovery target if buying momentum returns.

Key Levels

• Support at $1,424.80 (critical), and at $1,314.37 (major breakdown).
• Resistance at $1,512.00 - $1,548.00 (moving average cluster) and at $1,673.80 (50% Fib)
• Current momentum: buyers losing grip as evidenced by RSI 40 and the peak on August 17.

For investors: SanDisk demonstrates solid fundamentals with 175% FY revenue growth and 437% growth in data-center construction. There’s evidence of some pricing power in the first quarter as well. Long-term contracts may help dampen cyclicality, but two-thirds of the growth in the fourth quarter was related to pricing, not volume.

There may be some issues in the near future as NAND pricing may fall (especially with the YMTC IPO related capital dump and a general macroeconomic slowdown). Even with the pricing issues, the valuation remains high with ~$109x FY26; the price increased 35% and then decreased 9% after the price became volatile. Interest is waning on the stock since the RSI is at 40; the price may drop to the critical support of $1,425. Observe the stock warrants for any impact in NAND pricing and the YMTC IPO. This is analysis and not investment advice.