SanDisk Profit +672%: NAND Market Outlook
SanDisk released its fiscal 2026 second-quarter results after the U.S. market closed on January 29, reporting performance well beyond market expectations. The rapid expansion of artificial intelligence applications has triggered explosive demand for storage solutions, and SanDisk has been one of the major beneficiaries. Revenue, profit, earnings per share, and guidance for the coming quarter all exceeded analyst forecasts, briefly sending the company's share price up nearly 26 percent on January 30 before closing 6.85 percent higher at $576.25. The company's market value now approaches $85.3 billion, and major investment banks Jefferies and Goldman Sachs have lifted their price targets to $700.
For the quarter ending January 2, 2026, SanDisk recorded revenue of $3.025 billion, a 31 percent increase from the previous quarter and far above the consensus estimate of $2.62 billion. Under GAAP accounting, net profit reached $803 million—up 672 percent year on year and 617 percent sequentially—while earnings per share climbed to $5.15. Gross margin expanded to 50.9 percent, reflecting strong pricing power and an improving product mix.
On a non-GAAP basis, the figures were even stronger. Net profit rose to $967 million, with earnings per share hitting $6.20, significantly above the $3.78 analysts had expected. Non-GAAP gross margin reached 51.1 percent, well above the company's earlier forecast range of 41–43 percent. These results highlight SanDisk's success in controlling costs while shifting toward higher-value products.
Every business segment contributed to growth, led by the data center division, which serves applications such as AI training and cloud infrastructure. Data center sales climbed to $440 million, up 64 percent from the previous quarter and 76 percent from a year earlier, underscoring the powerful momentum created by global AI infrastructure build-outs.
A key milestone behind this performance was SanDisk's separation from Western Digital on February 21, 2025. The move established SanDisk as an independent publicly traded company and granted it full ownership of the SSD and NAND operations previously held within Western Digital. This strategic change positioned SanDisk to respond more quickly to the sharp rise in memory demand, converting market opportunities into tangible revenue growth.
Alongside the earnings release, SanDisk announced the extension of its joint-venture agreement with Japanese memory manufacturer Kioxia until December 31, 2034, five years beyond the original deadline. The alignment of the Kitakami and Yokkaichi facility agreements provides long-term manufacturing stability. As part of the arrangement, SanDisk will invest approximately $1.17 billion between 2026 and 2029 to support production services and secure supply, strengthening both companies' ability to capture opportunities in the NAND market.
Despite tight supply conditions and rising prices across the memory sector, SanDisk is maintaining a disciplined approach to capital spending. After investing several billion dollars over the past year, the company plans to keep expenditure at a similar level, primarily to support the transition to BiCS8 technology and to achieve 10–15 percent bit growth. Management emphasized that investments will remain focused on meeting sustainable demand while protecting healthy margins.
Looking ahead, SanDisk expressed strong confidence in the second half of fiscal 2026. For the third quarter, the company expects revenue between $4.4 and $4.8 billion, with a midpoint of $4.6 billion—almost 60 percent above market expectations. Adjusted earnings per share are projected at $12 to $14, more than double the consensus estimate and over 100 percent higher than the previous quarter.
Chief Financial Officer Luis noted that NAND supply is likely to tighten further in the third quarter as data center demand accelerates. While seasonal factors may lead to modest single-digit price adjustments, non-GAAP gross margin is expected to rise sharply to 65–67 percent, marking another significant step up from the 51.1 percent achieved in the second quarter.
SanDisk's latest results illustrate how the memory industry is being reshaped by AI and high-performance computing. With strengthened independence, expanded partnerships, and a clear technology roadmap, the company appears well positioned to navigate the next stage of growth in the global storage market.
