SanDisk's Data Center Revenue Surges 437%, Why Wall Street's Target Prices Are Mixed?

▲ SanDisk (SNDK)/AI-generated image ©

Despite SanDisk announcing better-than-expected results, Wall Street's evaluations are mixed due to its somewhat conservative revenue outlook for the next quarter.

According to cryptocurrency media outlet Watcher.Guru on August 6 (local time), SanDisk announced that its Q4 revenue increased by 51% quarter-over-quarter to $8.97 billion. Full-year revenue for fiscal year 2026 surged by 175% compared to fiscal year 2025, reaching $202.5 billion, with data center segment revenue alone skyrocketing by 437% over the year. Annual GAAP net income was $11.43 billion, and Non-GAAP diluted earnings per share (EPS) was $70.88.

Looking solely at Q4 results, GAAP net income increased by 91% quarter-over-quarter to $6.9 billion ($43.97 per diluted share), and Non-GAAP diluted EPS was $39.25. The gross margin rose by more than 6 percentage points from the previous quarter, reaching 84.6%. Additionally, the board approved an additional $14 billion share repurchase, increasing the total remaining authorization to $15.5 billion. For Q1 fiscal year 2027, the revenue forecast is $10.3 billion to $10.8 billion, and Non-GAAP EPS is $44.00 to $46.00.

David Goeckeler, SanDisk Chairman and CEO, emphasized strengthening the technology portfolio and growth in the data center segment, expressing confidence in generating sustainable free cash flow. However, the revenue outlook for the next quarter fell short of the market's most optimistic expectations, leading to adjustments in target stock prices by major investment banks.

James Schneider, an analyst at Goldman Sachs, maintained a "Buy" rating and a target price of $2,200. This implies an upside potential of approximately 63% compared to the stock price of $1,350.50 at the time of writing. Schneider stated that while high investor expectations, driven by strong pricing and increased adoption of NAND-based AI data centers, were somewhat tempered by the conservative revenue outlook, attention should be paid to long-term contracts and the pace of share repurchases.

Conversely, Mizuho Securities maintained its "Buy" rating but lowered its target price from the previous $2,200 to $1,900. Despite strong earnings outperformance, disappointment regarding the short-term outlook led to the price target reduction. As a result, the spectrum of SanDisk's target prices on Wall Street has widened, and with the stock showing weakness, debates surrounding the guidance are expected to continue for some time.

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