SanDisk (SNDK) Stock Drops 5% Despite Crushing Q3 Earnings

TLDR

• SanDisk posted Q3 revenue of $5.95B, a 251% jump year-over-year, beating the $4.73B analyst estimate.
• Adjusted EPS came in at $23.41, surpassing the $14.66 consensus by $8.75.
• The stock initially surged on results but then dropped roughly 5% in premarket Friday.
• Datacenter revenue rose 233% quarter-over-quarter, driven by pricing up 137% across all segments.
• SanDisk guided Q4 revenue of $7.75B–$8.25B, well above the $6.65B Street estimate.

SanDisk posted one of the strongest quarters in its history Thursday, with revenue and earnings blowing past Wall Street forecasts. But the stock still slipped in premarket Friday, down roughly 5%, even as the company laid out a bullish path forward.

Q3 revenue hit $5.95 billion, up 251% from a year ago. That topped analyst estimates of $4.73 billion by a wide margin. Adjusted EPS came in at $23.41, beating the consensus of $14.66 by nearly $9 per share.

The stock had climbed to around $1,096.51, near its 52-week high of $1,115, before pulling back.

Sandisk Corporation, SNDK

Datacenter was the clear engine of growth. Datacenter revenue surged 233% quarter-over-quarter, helped by a 137% jump in pricing across all segments. Consumer and client segments declined, but datacenters more than picked up the slack.

Multi-Year Deals Add Revenue Visibility

SanDisk signed five multi-year deals during and just after the quarter. Three were inked during Q3, with two more closing in Q4. The three Q3 deals alone are expected to generate at least $42 billion in contractual revenue, recorded quarterly.

There’s also a protection layer built in. SanDisk is guaranteed $11 billion in payments if customers exit their capacity commitments — a key backstop if the market turns.

Pricing has been a tailwind across the board. AI-driven supply tightness in NAND memory has let SanDisk push prices higher, and the upcoming launch of BiCS8-based QLC enterprise SSDs is expected to keep that momentum going.

What Analysts Are Saying

Wall Street wasted no time upgrading its targets.

BofA Securities raised its price target to $1,550 from $1,080, maintaining a Buy rating. The firm cited valuation upside, undervalued joint venture assets, and expected enterprise SSD market share gains in 2026.

Raymond James raised its target to $1,470 from $725, calling the datacenter inflection “clear” and praising the deepening customer relationships.

Mizuho lifted its target to $1,220 from $1,000 and kept an Outperform rating.

Despite the enthusiasm, InvestingPro flagged the stock as appearing overvalued relative to its Fair Value — though analysts forecast full-year earnings of $44.72 per share.

For Q4, SanDisk guided revenue of $7.75B to $8.25B, with non-GAAP diluted EPS expected between $30.00 and $33.00. That guidance projects roughly 35% revenue growth quarter-over-quarter. Gross margins for Q4 are expected to hit around 80%, up from the 74% consensus and up roughly 5,400 basis points year-over-year.

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