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On August 5, SanDisk (SNDK) posted the best quarter in its history. Revenue skyrocketed 372% from a year ago to $8.97 billion, gross margin hit a record 84.6%, and both revenue and earnings beat the Wall Street consensus. The company even added $14 billion to its buyback program. The performance looked extraordinary by almost every measure. Yet the stock, already well off its highs and volatile for weeks, fell 5.4% further after the release.
What spooked investors was not the quarter, but the outlook. SanDisk guided next quarter’s revenue to a midpoint of $10.55 billion, which reflects huge growth. But it still ended up being less than Wall Street’s estimates of around $10.8 billion. The stock has swung hard in the past year. From roughly $40 to its 52-week high of $2,354, then cut well over half before a slight recovery again in the past week. The expectations were still very high, and a lot of investors were ready to sell on any bad news. In such a case, missing guidance was enough to send it lower again.
