Sandisk Corporation (NASDAQ:SNDK) stock rose in Friday’s premarket session as broader market sentiment improved and investors bought the recent pullback following the stock’s post-earnings decline. Nasdaq futures gained 0.48%, while S&P 500 futures rose 0.19%.
Thursday’s decline came despite stronger-than-expected quarterly results, as investors questioned whether Sandisk can sustain its elevated profit margins as the memory market evolves. The market reaction contrasted with the company’s financial performance.
Sandisk reported quarterly earnings of $39.25 per share, beating the analyst consensus estimate of $34.45 by 13.9%, according to Benzinga Pro data. Revenue surged to $8.97 billion, topping the $8.39 billion consensus estimate and rising sharply from $1.9 billion in the year-ago quarter.
CEO Highlights Long-Term Deals
During an interview with Reuters, Chief Executive Officer David Goeckeler said Sandisk has shifted sales toward long-term purchase agreements instead of quarterly deals. The company said those agreements now have a median duration of four years.
Sandisk has eight agreements with six customers worth at least $93.9 billion. The company expects half of fiscal 2027 production and two-thirds of fiscal 2028 output to be sold under those deals. Goeckeler said that marks major progress from where the company stood three quarters ago.
Sandisk also said it signed five additional agreements since April under its new business model, including three with new customers and two expansions of existing deals. The board approved an additional $14 billion share repurchase program, bringing total remaining buyback authorization to $15.5 billion.
Analyst Outlook
The stock trades at about 17.1 times earnings. The analyst consensus rating remains Buy, with an average price forecast of $2,114.77. Recent analyst actions include:
- Citigroup maintained its Buy rating and lowered its price forecast to $2,100 on Aug. 6.
- RBC Capital maintained its Sector Perform rating and raised its price forecast to $1,300 on Aug. 6.
- Wells Fargo maintained its Equal-Weight rating and lowered its price forecast to $1,400 on Aug. 6.
Technical Picture
The stock has retreated from its summer highs but continues to trade well above longer-term trend levels, suggesting investors remain constructive on the company’s outlook despite near-term volatility.
Sandisk remains in a long-term uptrend. The stock trades about 49% above its 200-day simple moving average, although it remains 9% below its 20-day SMA and nearly 24% below its 50-day SMA.
That setup points to a short-term correction within a broader bullish trend.
Momentum indicators also show signs of stabilizing. The moving average convergence divergence (MACD) indicator remains above its signal line, suggesting selling pressure has eased and upside momentum is beginning to improve.
The 20-day SMA remains below the 50-day SMA, reflecting near-term weakness. However, the 50-day SMA continues to trade above the 200-day SMA, preserving the longer-term bullish trend.
A key support level to watch is around $1,277.50, where buyers previously stepped in.
Benzinga Edge Rankings
Benzinga Edge assigns Sandisk a Momentum Score of 99.87, reflecting strong relative performance over the past year. However, the stock carries a Value Score of 22.15, suggesting its valuation is less attractive than many peers.
The combination indicates investors continue to favor Sandisk for its price momentum rather than its valuation.
ETF Exposure
Sandisk represents a meaningful holding in several exchange-traded funds, including:
- Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD): 7.64% portfolio weight
- Invesco S&P 500 Pure Growth ETF (NYSE:RPG): 9.61% portfolio weight
- First Trust US Equity Opportunities ETF (NYSE:FPX): 7.37% portfolio weight
Large fund inflows or outflows in these ETFs could influence trading activity in Sandisk shares.
Price Action
SNDK Stock Price Activity: Sandisk shares were up 3.53% at $1302.96 during premarket trading on Friday, according to Benzinga Pro data.
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