SanDisk (SNDK) Stock Rockets 26% — Investors Piled In During the Market Dip

TLDR

• SanDisk (SNDK) jumped 25.5% week-on-week, with a 6.92% gain in Friday’s session alone.
• Net income surged 672% year-over-year in Q2 FY2026 to $803 million, with revenue up 61% to $3.025 billion.
• SanDisk guides Q3 FY2026 revenue between $4.4B and $4.8B, implying growth of up to 183% year-over-year.
• Gross margins are expected to hit 65%–67% in Q3, and the company reduced debt from ~$2 billion to ~$603 million.
• Wall Street’s 12-month consensus price target implies ~19% upside, though the stock trades at a premium 4.41x forward sales, earning a Value Score of F.

SanDisk Corp. (SNDK) had a strong week, climbing 25.5% as investors loaded up on the stock during a broader market sell-off. On Friday alone, the stock gained 6.92%.

Sandisk Corporation, SNDK

The move came as funds rotated out of sectors hit hardest by ongoing Middle East tensions and into tech and storage names. A $2 billion investment by Nvidia into an AI infrastructure company earlier in the week also helped lift sentiment across the sector.

SanDisk’s fundamentals gave investors plenty to work with. In Q2 FY2026, the company posted net income of $803 million — a 672% jump from $104 million in the same quarter a year ago. Revenue rose 61% to $3.025 billion, up from $1.876 billion.

Enterprise solid-state drives are driving much of that growth. Enterprise SSD revenue jumped 64% sequentially in Q2, and management expects another large step-up in Q3 with further acceleration in the back half of the year.

Looking ahead to Q3, SanDisk guided revenue in the range of $4.4 billion to $4.8 billion. That would represent growth of 159% to 183% compared to the $1.695 billion reported in Q3 of the prior year. Gross margins are expected to come in between 65% and 67%.

The company also flagged that NAND supply will be tighter in Q3 than it was in Q2. CEO David Goeckeler has said demand will remain “well above supply beyond calendar year 2026,” which is underpinning the pricing strength.

Balance Sheet Improvement

SanDisk’s balance sheet has improved fast. The company ended Q2 with roughly $1.5 billion in cash and generated $843 million in adjusted free cash flow. Operating cash flow came in at $1.019 billion.

Debt was cut to around $603 million — down from about $2 billion previously. Management says it plans to keep reducing leverage while continuing to invest in its BiCS8 NAND technology transition and expanding its enterprise SSD lineup.

SanDisk has also started entering multiyear agreements with customers that include prepayments, a move management says will improve planning visibility going forward.

Valuation Debate

With the stock up over 1,194% in the past year and 206% over the past three months, some analysts are starting to ask whether the run has gone too far.

SanDisk currently trades at 4.41x forward 12-month sales, compared to 2.3x for the broader industry. It carries a Value Score of F, suggesting the stock is expensive relative to peers. Western Digital and Seagate trade at 6.21x and 6.4x forward sales respectively, while Silicon Motion Technology sits at 3.22x.

The consensus Wall Street 12-month price target implies about 19% upside from current levels. That compares favorably to Micron, whose average analyst price target sits slightly below its current stock price.

Micron trades at a lower 12.7x forward earnings compared to SanDisk’s 15.8x. Some analysts argue Micron’s diversification across DRAM, NAND, and high-bandwidth memory makes it a stronger long-term pick, while SanDisk is purely a NAND play.

Both companies report that their respective products are sold out well into 2026.

SanDisk holds a Zacks Rank #1 with a Growth Score of A. The stock closed Friday at $661.49.

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