SanDisk’s Growth Still Hinges on Flash-Memory Pricing

what happened

According to GuruFocus, SanDisk Corp. (SNDK) is heading into its Oct. 29 earnings release in considerably better condition than during the previous downturn. In fiscal 2023, when the company was part of Western Digital, sales fell 38% to about $6.1 billion, while the average selling price per gigabyte dropped 39%. Gross margin contracted from 33.3% to 7.1%, and the company posted a loss of nearly $2.1 billion.

The picture has since nearly reversed. Fourth-quarter fiscal 2026 sales jumped 51% sequentially to $8.97 billion, and gross margin widened to 84.6%. Management said that improved pricing accounted for roughly two-thirds of the increase in revenue.

That same dependence is the main risk. Artificial-intelligence demand has supported the storage business, but SanDisk’s latest results highlighted how sharply profitability can move with prices. If flash-memory prices weaken, margins could come under pressure before revenue does. The company expects fiscal first-quarter sales of $10.3 billion to $10.8 billion, approximately 15% to 20% above the previous quarter. The Oct. 29 report should offer a clearer view of whether business demand is strong enough to keep margins elevated as price increases begin to slow.

why it matters

For markets, the central issue is whether AI-related storage demand can offset slower price growth. A softer pricing environment could pressure margins even if SanDisk continues to increase sales.

instruments