SanDisk Traded Its Best Prices For Something Rarer

SanDisk (SNDK) shares changed hands at $70.50 a year ago. They now sit at $1,737.99. Flash prices rose over that stretch, and the whole memory group rose with them, so part of this is the cycle. The rest is what SanDisk did while it held the leverage, and that part comes with a bill.

SanDisk Rose Far More Than The Memory Boom Alone Explains

Micron Technology (MU) returned 662.1% over the same twelve months, and SanDisk’s 2365.4% is more than three times that. A cycle everyone shared does not explain a gap that wide.

What changed sits inside the mix. Revenue grew 175% in fiscal 2026, with datacenter revenue up 437% against 195% at edge. Non-GAAP gross margin reached 84.6% in fiscal Q4 2026, against 26.4% a year earlier. Management is blunt that this industry has run boom to bust before, which is why the next part matters most.

SanDisk Has Already Sold Years Of Flash It Has Not Made

The demand came from the AI buildout. Management puts datacenter at roughly 12% of its bits a year ago and 38% of the portfolio exiting fiscal 2026, its fastest-growing end market, with high-capacity enterprise SSDs serving those inference workloads. SanDisk’s BiCS 8 node ramped to the majority of bit production.

The durable change is contractual. SanDisk has signed eight datacenter and edge customers to what it calls new business models, agreements running up to five years with a weighted average length above four years. Those deals carry a minimum of $93.9 billion of revenue at floor pricing across terms that long, against the $20.2 billion the company booked in all of fiscal 2026. Customers have posted $16.5 billion of cash deposits and financial instruments behind them.

So What Does Contracted Flash Actually Buy You?

Visibility, and a narrower band. Contract pricing mixes fixed and variable pieces, and the variable piece carries floors as well as ceilings. Management expects roughly 80% gross margin on the contracted business, says it is not a drag on gross margin, and guides company non-GAAP gross margin to 83% to 85% for fiscal Q1 2027.

The band is the trade. More than half of fiscal 2027 bits and about two-thirds of fiscal 2028 bits will price inside it rather than at whatever the spot market pays. Owning SanDisk now means owning mostly contracted flash rather than spot flash.

Not every part of the business is booming. Management says smartphone and PC units are down by mid-teens percentages in calendar 2026, though average capacity per phone is up mid-teens and PC capacity is flat, with both markets expected back to growth in calendar 2027. The guide climbs anyway: management pointed to $10.3 billion to $10.8 billion of revenue for fiscal Q1 2027, and whether it keeps doing so as more bits move under contract is the real question. That is what our screen for the companies whose guidance keeps rising is built to show.

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