Sandisk makes NAND flash, the memory that stores data in phones, PCs and AI data centers. Spun off from Western Digital in February 2025, it went from losses to an 85% gross margin in a year as flash prices soared. The shares are up more than eightfold in twelve months and down about 40% from their high.
Today’s close against the report’s numbers, updated every weekday. The analysis is as of October 21, 2026; the rating as of October 22, 2026. Both change only when the report is revised.
The cycle model’s bear-to-bull range, the probability-weighted value, the price, its 52-week range and the analysts’ median target. The copper line marks the base case; the fine dotted line is today’s close.
Written on October 21, 2026, ahead of its first-quarter results on October 29. Figures are from the company’s filings and releases unless noted. Not investment advice. The author holds no SNDK shares.
Sandisk sells only NAND flash. Edge (61% of last quarter’s revenue) is flash for phones and PCs; Datacenter (33%) is enterprise SSDs, now the fastest-growing part as AI systems store and move far more data; Consumer is memory cards and portable drives. It makes its chips in Japan through Flash Ventures, a joint venture with Kioxia that shares the cost of the factories.
Because it does nothing but flash, Sandisk is the most direct way to own the NAND cycle. That made it one of the best-performing stocks of the AI memory boom, and also the one most exposed if flash prices turn.
In the quarter to July 3, revenue rose 51% from the quarter before; about two-thirds of that came from higher prices and one-third from volume. The gross margin went from about 51% in the second quarter to 78% in the third and 84.6% in the fourth. For fiscal 2026 revenue was $20.2 billion, up 175%, and net income $11.4 billion.
For the first quarter of fiscal 2027 Sandisk guided to $10.3–10.8 billion of revenue, an 83–85% gross margin and $44–46 of adjusted earnings per share. It bought back $4.5 billion of stock in the quarter and the board added $14 billion to the buyback. Results come on October 29.
| FY2023 | FY2024 | FY2025 | FY2026 | |
|---|---|---|---|---|
| Revenue | $6.1B | $6.7B | $7.4B | $20.2B |
| Operating margin | −33.4% | −7.0% | −18.7% | 61.2% |
| Net income | −$2.1B | −$0.7B | −$1.6B | $11.4B |
| Operating cash flow | −$0.7B | −$0.3B | $0.1B | $11.7B |
| Capital spending | $0.2B | $0.2B | $0.2B | $0.2B |
| Free cash flow | −$0.9B | −$0.5B | −$0.1B | $11.5B |
Sandisk lost money in each of its three years before the boom, including $2.1 billion in fiscal 2023, the last flash downturn. The swing to an $11.4 billion profit came almost entirely from price, which is why the same table is the main risk. Capital spending stays low because Flash Ventures carries most of the factory cost.
Sandisk now sells much of its output under multi-year agreements whose prices can move only between a floor and a ceiling. Management expects them to cover over half of its bits in fiscal 2027 and about two-thirds in fiscal 2028. The floors protect it in a downturn; the ceilings cap how much it gains if the shortage worsens. The CEO has called a mid-80s gross margin a fair return, so today’s margin is close to the top.
At the end of fiscal 2026 Sandisk had $4.8 billion of cash and had repaid all its debt. The model assumes about 150 million shares by 2030, down from about 155 million, as buybacks continue.
The same method as Micron: free cash flow for fiscal 2027–2030 at each scenario’s prices, then an exit value on mid-cycle earnings, discounted at 15% (beta 2.1 gives a CAPM cost of about 14.6%), plus net cash.
| Bear | Base | Bull | |
|---|---|---|---|
| Revenue, FY2027 / FY2028 | $40B / $35B | $45B / $50B | $52B / $65B |
| Revenue, FY2029 / FY2030 | $20B / $16B | $35B / $25B | $65B / $60B |
| Free cash flow, four years | $41B | $77B | $154B |
| Mid-cycle revenue and operating margin | $18B at 12% | $28B at 25% | $50B at 40% |
| Exit multiple | 8× | 10× | 12× |
| Value per share | $306 | $636 | $1,487 |
| Probability | 25% | 50% | 25% |
Weighted 25/50/25: $766. The base case keeps the shortage through fiscal 2028, as the industry expects, then has prices fall back toward a mid-cycle margin still well above anything Sandisk earned before.
Every figure in this valuation comes from one model script, rerun and checked against this page each time the site is built. The XLSX model rebuilds it in live formulas: change any blue input and every year’s cash flow, the bridge to the value, the scenarios and the sensitivity table recalculate.
| To justify the price, you need | Against |
|---|---|
| About $25 billion of after-tax profit a year from 2031, valued at 10×, after the base case’s cash flows | About what Sandisk should earn in fiscal 2027, at peak prices |
| Or the bull case: revenue of $60 billion or more and 60% cash margins through 2030 | Contract ceilings limit how high prices can go |
The price sits just below our bull case. Analysts are far more optimistic, with a median target of about $2,225. At about 8 times next year’s expected earnings the stock looks cheap, but those earnings are made at peak prices that the company’s own contracts expect to cap.
| Risk | Why it matters |
|---|---|
| The flash cycle | Flash prices drove almost all of the profit; new supply from 2028 could reverse them quickly. |
| Single product | Unlike Micron, Sandisk has no DRAM or HBM to cushion a NAND downturn. |
| Contract ceilings | Prices are capped on more than half of its bits in fiscal 2027, limiting upside. |
| Kioxia | Its factories are shared with Kioxia, so supply and costs depend on the joint venture. |
| Volatility | The shares fell about 40% in July on AI overbuilding fears. |
Upside: enterprise SSD demand from AI inference, high-bandwidth flash for AI systems, contract floors that soften the next downturn, and large buybacks.
Sandisk turned a loss-making business into one with an 85% gross margin and no debt in about a year. The price sits close to the bull case, and its own contracts cap how far prices can rise.
What would change the value: First-quarter results on October 29 will show how far flash prices are still rising.
Ranges, not three cases. The expected value is the average of 4,000 runs of this report’s own model, with every input drawn from a range: the base case is the middle, and the bear and bull cases are the 10th and 90th percentiles. Business inputs move together; the discount rate moves on its own. The 25/50/25 weighting in the valuation section gives $766. How the ranges work
Two different questions. The rating is relative: it asks whether the stock is cheaper or dearer than the S&P 500 on the same assumptions. The absolute view asks whether it is worth its price at all: on its own the stock trades above our estimated value, which is 45% below the price.
On the same assumptions every report uses (a 5.15% Treasury yield and a 4.5% equity premium), the S&P 500 itself is worth about 68% of its price. The rating compares each stock with that: Buy if it is at least 15% cheaper than the market on this basis, Sell if at least 15% dearer, Hold in between. It is the same rule for every company, whoever owns it. The rating depends on that assumption: it would be Hold if the index grows 6% a year and Sell at 10%, against 8% here. How ratings work
Against the Street: Analysts’ median of about $2,225 rests on next year’s peak earnings. This model assumes flash prices fall back after 2028, to a mid-cycle margin of 25%.
| Measure | Sandisk | Industry median | Rank | |
|---|---|---|---|---|
| Revenue growth, last fiscal year | 175.3% | 15.6% | 1 of 10 | Better than the median |
| Operating margin | 61.2% | 9.4% | 1 of 10 | Better than the median |
| Price to earnings | 17.0× | 28.0× | 4 of 10 | Better than the median |
| Free cash flow yield | 5.9% | 2.8% | 2 of 10 | Better than the median |
Peers: the 9 other S&P 500 companies in Technology Hardware, Storage & Peripherals with complete data (AAPL, DELL, HPE, HPQ, NTAP, P, SMCI, STX, WDC). Last twelve months where reported, from SEC filings; prices from the latest close. A lower price-to-earnings ratio ranks higher. These figures update with each data run; the rating does not.
Sandisk earns a fortune at today’s prices; the shares assume those prices stay.
| What | Figures | Source |
|---|---|---|
| Latest results | $8.97B (Revenue, Q4 FY2026, +51% on Q3), 84.6% (Gross margin), $6.90B (Net income), $7.08B (Free cash flow) and others | Q4 FY2026 results; Q1 results date |
| The numbers (five-year table) | Five years of annual figures and the last twelve months | SEC XBRL company facts; latest: 10-K for the period to 2026-07-03, 10-Q for the period to 2026-04-03 |
| Price at writing | $1,378.22 (Close, Oct 21, 2026) | Yahoo Finance; the time of the quote is stated beside the price |
| Discount rate inputs | 10-year Treasury 5.15%, equity risk premium 4.5% | Fixed for every report so they can be compared; How ratings work |
| Valuation | Every value, case and sensitivity | This site’s model: XLSX, CSV |
| Checked by hand | Not yet | Reports are added to the audit log as they are revised |
| Input | Bear (10th percentile) | Base (median) | Bull (90th percentile) |
|---|---|---|---|
| Revenue path | $40B/$35B/$20B/$16B | $45B/$50B/$35B/$25B | $52B/$65B/$65B/$60B |
| Free-cash-flow margin path | 60.0%/42.0%/10.0%/0.0% | 65.0%/60.0%/35.0%/20.0% | 68.0%/65.0%/62.0%/60.0% |
| Normal-year revenue | $18B | $28B | $50B |
| Normal-year margin | 12.0% | 25.0% | 40.0% |
| Exit multiple | 8× | 10× | 12× |
| Simulation result | |
|---|---|
| Expected value (average of 4,000 runs) | $752.36 |
| Likely range, 10th to 90th percentile | $350.93 to $1,277.66 |
| Median | $654.62 |
| Chance the value is above the price | 8% |
| Chance it is cheaper than the S&P 500 | 25% |
Each input is drawn from a split normal: its bear and bull values are the 10th and 90th percentiles, so the two sides can differ. Business inputs share a common factor (correlation 0.6); the discount rate is the same in every case, so it is not drawn. Inputs not listed are held at their base value. How the simulation works.