SanDisk (SNDK) Stock Surges 61% on AI Storage Demand — But Can the Rally Last?

TLDR

• SanDisk reported Q2 fiscal 2026 revenue of $3.03 billion, up 61% year-over-year
• Gross margin jumped from 29.8% to 50.9% in a single quarter
• Datacenter revenue rose 64% sequentially, driven by AI infrastructure demand
• Q3 guidance points to $4.40B–$4.80B in revenue, with EPS of $12–$14
• 24 analysts rate the stock Moderate Buy, with an average price target of $594.48

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SanDisk was spun off from Western Digital and is now a standalone flash memory company. That separation gave investors a cleaner picture of the business, focused entirely on NAND storage.

Sandisk Corporation, SNDK

The company’s latest results were strong. SanDisk posted revenue of $3.03 billion for fiscal Q2 2026. That was up 31% from the previous quarter and 61% from the same period a year ago.

Gross margin told an even bigger story. It climbed from 29.8% to 50.9% in a single quarter. That kind of jump reflects both better pricing across the NAND market and a shift toward higher-value products.

The biggest driver was the datacenter segment. SanDisk said datacenter revenue rose 64% in just one quarter. That growth came from AI infrastructure builders, large tech companies, and semi-custom storage customers.

Enterprise and datacenter SSD products carry better margins than consumer storage. The shift toward those products is one reason profitability improved so sharply.

Guidance Points to Continued Strength

SanDisk’s outlook was also strong. The company guided for Q3 fiscal 2026 revenue of $4.40 billion to $4.80 billion. Non-GAAP diluted earnings per share guidance came in at $12.00 to $14.00.

Those numbers suggest demand has not faded. In fact, the pace of growth appears to be accelerating from the January quarter.

Despite the strong results, the stock’s trailing 12-month earnings per share remains negative at -7.6. That reflects how deep the last NAND downturn was, even if conditions have clearly improved.

Wall Street is still broadly positive on the name. According to MarketBeat, 24 analysts cover SanDisk. The breakdown is 15 buy ratings, 2 strong buy ratings, 6 hold ratings, and 1 sell rating. That gives the stock a Moderate Buy consensus.

The average 12-month price target sits at $594.48, slightly above the recent share price of around $572.50. That leaves limited implied upside based on current analyst targets.

Valuation Reflects High Expectations

SanDisk’s market cap recently sat near $42.9 billion. That is a large number for a company still working through the tail end of a cyclical downturn.

Investors are clearly pricing in durable improvement. The AI buildout narrative gives the company a stronger story than a typical NAND recovery would offer.

Memory stocks are known for sharp cycles. The same operating leverage that lifts margins fast can also pull them back just as quickly when pricing softens or supply increases.

The key question is whether the current upturn is a standard industry recovery or something more lasting. Strong datacenter demand tied to AI infrastructure could support margins longer than in prior cycles.

SanDisk’s most recent data point is the Q3 guidance range. Revenue expectations of up to $4.80 billion suggest the company sees no immediate slowdown in demand from its key customers.

Final Thoughts

SanDisk looks like a company with real momentum, improving profitability, and a much cleaner investment case after the spin-off. The business is clearly benefiting from AI-driven storage demand and better industry conditions. Still, after a strong run, the stock looks more like a quality cyclical name with solid support than an obvious bargain.

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