SNDK Stock Falls 7% as Weak SanDisk Q1 Guidance Offsets Strong Q4 and $14B Buyback Plan

SanDisk (NASDAQ: SNDK) shares have fallen about 7% after the company reported better-than-expected fiscal fourth-quarter earnings, as investors focused on a softer revenue outlook for the current quarter. Despite record revenue growth, expanding data center sales, and a larger share repurchase program, forward guidance came in below Wall Street expectations and weighed on sentiment.

The stock traded near $1,286 during intraday trading after the earnings release. Analysts also pointed to moderating pricing trends and lower gross margin guidance as factors that limited the market's reaction to the strong quarterly performance.

SanDisk Beats Q4 Estimates but Q1 Outlook Misses Expectations

SanDisk reported fiscal fourth-quarter revenue of $8.97 billion, exceeding analyst estimates of $8.39 billion. Revenue increased 51% from the previous quarter and rose 372% from the same period last year. Adjusted earnings reached $39.25 per share, above the consensus estimate of $34.45.

The company forecast fiscal first-quarter revenue between $10.3 billion and $10.8 billion. The midpoint of that range came in below Wall Street expectations of about $10.82 billion. Gross margin guidance of 83% to 85% also suggested a slight decline from the 84.6% reported in the fourth quarter.

Chief Executive Officer David Goeckeler said, ”We closed fiscal 2026 with a leading technology portfolio, established datacenter as a key growth pillar, and deepened our customer partnerships.” During the earnings call, he added, ”We want to get to this kind of boom and bust out of it,” while noting that the company wants deeper customer relationships to improve long-term planning.

The weaker outlook overshadowed the quarterly beat and triggered selling despite SanDisk reporting one of its strongest financial performances.

Data Center Business Drives Growth as Buyback Expands

Enterprise demand remained the company's strongest growth area during the quarter. Data center revenue climbed 103% sequentially to $2.98 billion, while Edge revenue increased 48% to $5.43 billion. Consumer revenue declined 32% to $556 million as higher pricing reduced demand in that segment.

Management attributed stronger revenue to a better customer mix and improved pricing across enterprise products. For the full fiscal year 2026, SanDisk generated revenue of $20.25 billion, up 175% from the previous year, while GAAP net income reached $11.43 billion.

The board also approved an additional $14 billion share repurchase authorization, increasing total remaining buyback capacity to $15.5 billion. The company announced five additional new business model agreements since April, including three new customers, further expanding long-term supply commitments.

Analysts Stay Positive Despite Near-Term Concerns

Following the earnings release, Jefferies lowered its price target on SanDisk to $1,750 from $3,000 while maintaining a Buy rating. The firm described the results as mixed, stating that strong execution during the June quarter was offset by guidance that largely matched expectations instead of exceeding them.

Jefferies said investors are likely to focus on moderating NAND pricing, lower gross margin guidance, and whether inventory growth within the Edge business could slow future bit demand a bit. The brokerage also noted that Edge contributed about 61% of quarterly revenue after growing sharply during the period.

At the same time, analysts continued to identify the data center business as SanDisk's primary long-term growth engine. Jefferies said the company continues to expand its New Business Model program, with eight customers now participating and more than half of expected fiscal 2027 production already committed under long-term agreements.