SanDisk Slips as Wall Street Squares Off Over the Memory Cycle
Published on 10/30/2026 at 19:50 | Editorial boerse-global.de
SanDisk shares fell 4.3% on Thursday, caught in a broad selloff across chip and AI-infrastructure names as Intel and Amazon results weighed on the sector and investors fretted over the returns on artificial-intelligence spending. The stock's move came a day after the company announced an eight-for-one stock split—a purely mechanical adjustment that divides each share into eight and leaves shareholder value untouched—alongside quarterly results that beat expectations.
Under the split, investors on the register as of November 9 will receive seven additional shares for every one they hold. Distribution is set for after the close on November 19, with split-adjusted trading expected to begin November 20.
Two Houses, One Question
The day's real debate has little to do with the split. Goldman Sachs trimmed its price target to $2,000 from $2,200 while keeping its buy rating, citing valuation even as it noted that both the quarterly figures and the outlook topped market expectations. Morningstar moved the other way, cutting its fair value to $870 from $1,000 on expectations that price growth will fade sooner and faster than previously assumed.
What separates the two is not the assessment of business already booked but the assumptions for the next phase of the cycle. Goldman points to limited growth in NAND supply, a more favorable product mix, several orders from major cloud providers for data-center SSDs and the prospect of larger buybacks. Morningstar anticipates a significant capacity buildout by memory makers—and a downturn to follow.
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Contracts Put to the Test
Against that skepticism, SanDisk has laid out an extensive demand plan. Finance chief Luis Visoso said on yesterday's earnings call that roughly half of flash bits for fiscal 2027 are locked in through long-term NBM agreements. Chief executive David Goeckeler added that the demand pipeline stretches beyond the end of the decade and exceeds supply, with one major customer already through a second round of agreements and talks under way with others.
Morningstar doubts those arrangements offer full protection against a price decline: customers could renegotiate or walk away if market prices fall. That is the research firm's risk assessment, not a report of contracts already changed. The distinction matters—a deep demand pipeline proves customer interest, not its economic resilience in a weaker pricing environment, and that gap is precisely where forecasts for SanDisk's future earnings power diverge.
Volume, Not Just Price
The quarterly numbers offer useful context. Data-center revenue climbed 61% sequentially to $4.8 billion in the first quarter of fiscal 2027, and management said the growth was not predominantly price-driven—higher shipment volumes contributed the larger share. About 60% of the sequential revenue increase came from volume and 40% from prices.
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For the first quarter, SanDisk reported revenue of $11.03 billion and non-GAAP diluted earnings per share of $49.51. It guided second-quarter revenue to $12.2 billion–$12.6 billion and non-GAAP diluted EPS to $55–$57, both above the just-reported figures, with an adjusted gross margin of 84.5% to 85.5%. That outlook signals no sharp margin collapse, though it leaves the longer cycle question open.
Buybacks are already under way: the company repurchased about 3.2 million shares for $5.0 billion in the first quarter, and 6.0 million shares, or roughly 4% of shares outstanding, across the two preceding quarters. Whether volume growth and customer agreements hold up once rising memory prices stop providing a tailwind is what will decide how SanDisk is valued—and Thursday's 4.3% decline shows how heavily investors are weighing that risk.
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