Sandisk Corp. (NASDAQ:SNDK) stock fell about 10% Friday as a broader technology sell-off weighed on high-growth stocks. The Nasdaq Composite declined 2.85%, while the S&P 500 lost 1.41%.
Despite the decline, Sandisk continues to benefit from stronger data center demand, higher pricing and improving long-term revenue visibility as artificial intelligence drives storage demand.
Rosenblatt analyst Kevin Cassidy maintained a Buy rating and a $2,400 price forecast, based on 10 times his fiscal 2028 non-GAAP earnings-per-share estimate.
Data Center Demand Fuels Growth
Cassidy said Sandisk reported stronger-than-expected fiscal first-quarter results, with revenue surging 378% year over year and 23% sequentially to $11.03 billion. Revenue topped his $10.55 billion estimate and the $10.72 billion consensus.
Adjusted earnings reached $49.51 per share, exceeding Cassidy’s $45.80 estimate and the $46.67 consensus.
Data center revenue jumped 1,682% year over year and 61% sequentially to $4.80 billion, making it the primary growth driver.
Sandisk also reported a non-GAAP gross margin of 85.1% and adjusted free cash flow of $5.7 billion.
Long-Term Contracts Strengthen Revenue Visibility
Cassidy said Sandisk’s New Business Model agreements are performing better than expected.
The company has secured agreements with eight customers covering about 50% of fiscal 2027 bit production and roughly two-thirds of fiscal 2028 production. The contracts represent $93.9 billion in minimum committed revenue.
Cassidy said Sandisk’s pipeline of potential New Business Model agreements exceeds its available supply through the end of the decade, signaling sustained demand for its memory products.
He added that 95% of existing agreements are with investment-grade customers, strengthening confidence in long-term revenue visibility.
Cassidy said demand from prospective agreements exceeds available supply through the end of the decade. He expects contracted coverage to increase as Sandisk signs new customers and extends existing agreements.
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AI Creates New Storage Opportunities
Cassidy identified AI inference as another significant growth opportunity.
He expects growing adoption of triple-level cell (TLC) and quad-level cell (QLC) enterprise solid-state drives, along with key-value (KV) cache tiering, to expand NAND flash storage demand in data centers.
Sandisk expects KV cache to account for roughly one-third of the AI data center flash market by the end of the decade.
Cassidy also highlighted the company’s BiCS technology roadmap and emerging high-bandwidth flash (HBF) technology, with initial HBF samples expected in 2027.
Analyst Raises Earnings Forecasts
Cassidy raised his fiscal second-quarter revenue estimate to $12.40 billion from $12.20 billion and his adjusted EPS estimate to $56.90 from $52.98.
For fiscal 2027, he increased his revenue forecast to $49.48 billion from $48.80 billion and his adjusted EPS forecast to $221.28 from $210.
For fiscal 2028, Cassidy maintained his $60 billion revenue estimate but raised his adjusted EPS forecast to $247.71 from $240.
Sandisk forecast fiscal second-quarter revenue of $12.2 billion to $12.6 billion and adjusted EPS of $55 to $57, exceeding Cassidy’s previous estimates.
Cassidy also said Sandisk expects data center NAND bit demand to grow about 40% in 2027. However, the company plans to maintain disciplined bit production growth in the mid-to-high teens rather than aggressively expand capacity.
SNDK Price Action: Sandisk shares were down 10.21% at $1,194.29 at the time of publication Friday, according to Benzinga Pro data.
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