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Sandisk (SNDK) is scheduled to report its fiscal fourth-quarter 2026 results on Wednesday, Aug. 5. Expectations are high for another strong quarter, supported by sustained AI-driven demand and a favorable pricing environment in the NAND memory market. These factors could enable the company to deliver revenue and earnings above consensus estimates.
Despite these positive fundamentals, SNDK stock has declined about 40% from its recent peak, creating a notable disconnect between its operating performance and market valuation. If the company delivers another strong quarter and provides an upbeat outlook, the current share price could represent an attractive long-term buying opportunity.
AI Demand and Pricing Tailwinds Point to Another Strong Quarter
Sandisk expects revenue of $7.75 billion to $8.25 billion in Q4, with the midpoint of $8 billion implying approximately 321% year-over-year (YOY) growth. That would mark acceleration after fiscal Q3 revenue surged 251% YOY to $5.95 billion.
Sandisk's primary growth driver remains the rapid expansion of AI infrastructure. As hyperscalers and enterprises deploy increasingly AI-intensive workloads, demand for high-performance NAND storage continues to rise. This structural shift is driving higher shipment volumes while also supporting stronger pricing across the memory industry.
A favorable supply-demand balance has further strengthened the company's position. Rising NAND prices have boosted both revenue and operating cash flow, and management believes these pricing dynamics are likely to remain favorable through calendar 2026 and beyond. This has encouraged Sandisk to increase investments in higher-value opportunities that can support both near-term growth and long-term profitability.
Another key growth engine is the data-center business. Revenue from this segment is expected to remain robust, benefiting from both higher shipment volumes and improved average selling prices (ASPs).
Overall, accelerating AI-related storage demand and higher ASPs provide confidence in Sandisk's growth trajectory.
Margin Expansion Should Drive an Earnings Beat
Strong revenue growth is expected to translate into significant profitability gains in Q4.
Higher average selling prices, improving product mix, and continued growth in exabyte shipments should support further gross margin expansion. Management has guided for an adjusted gross margin of 79% to 81% in Q4, with the midpoint of 80% representing both a sequential improvement and substantial YOY expansion.
Sandisk expects adjusted EPS between $30 and $33, compared with $0.29 in the year-ago quarter and $23.41 in Q3 2026. Notably, Wall Street expects adjusted EPS of $33.28, which is slightly above guidance. That suggests analysts see additional upside from favorable pricing and operating leverage.
Overall, another quarter of strong execution appears likely, with both revenue and earnings benefiting from durable AI-driven demand and a strong memory pricing cycle.
Valuation Does Not Reflect Sandisk's Growth Potential
Despite the sharp improvement in fundamentals, Sandisk's valuation remains low following the recent selloff. SNDK stock currently trades at just 6.5 times forward earnings, a multiple that appears difficult to justify given the company's earnings trajectory and favorable industry backdrop.
Sandisk is benefiting from one of the strongest AI-related demand cycles in the semiconductor industry. Analyst consensus estimates call for 188% EPS growth in fiscal 2027, even against challenging YOY comparisons. If Sandisk continues to execute as expected, its earnings growth could justify a significantly higher valuation multiple over time.
Another overlooked catalyst is the company's new business models (NBMs), the multiyear supply agreements that improve revenue visibility and reduce earnings volatility. At the time of its Q3 earnings release, Sandisk had signed five agreements, with three agreements signed during the quarter offering a combined minimum revenue commitment of $42 billion. As the memory firm signs additional long-term contracts, visibility into recurring revenue should improve further, strengthening the investment case.
The Bottom Line
Sandisk enters its Q4 earnings report with strong momentum. AI-driven demand, improving NAND pricing, expanding margins, and accelerating data-center growth position the company to deliver another impressive quarter.
Yet SNDK stock looks undervalued. With earnings expected to grow rapidly, long-term supply agreements adding stability, and AI infrastructure spending remaining robust, Sandisk appears well-positioned for further upside. Wall Street is bullish, with most analysts recommending a “Strong Buy” on Sandisk stock.
