What Could Send SanDisk Stock Soaring?
SanDisk (SNDK) stock returned about 1,240% over the twelve months through October 5, 2026, against about 16% for the S&P 500, so you may wonder what is left. Yet the shares trade at about 22 times earnings, close to the index’s 21.5. A price like that appears to assume the profits will fade, but management says it has changed how SanDisk sells. So what could convince buyers that SanDisk’s profits will hold up?
SanDisk Is Signing Customers To Multi-Year Contracts
SanDisk makes NAND, the flash memory that stores data in smartphones, PCs, and data centers. Customers now sign contracts that run up to 5 years, with a weighted average length of over 4 years. Part of the price is fixed, and the part that moves has a floor and a ceiling.
A floor matters most when flash prices fall. If the market price drops, the part of the contract price that moves cannot go below its floor.
Customers also back those promises with money. Across all the contracts, they have put up $16.5 billion of guarantees in cash deposits and financial instruments. By its August 5, 2026 call, SanDisk had 8 customers on these contracts. It had signed 5 more agreements since its April call, 3 of them with new customers.
How Much Of SanDisk’s Volume Will The Contracts Cover?
Management’s target is for the contracts to cover more than 50% of SanDisk’s storage volume in fiscal 2027, and about two-thirds in fiscal 2028.
Management puts the contracts’ total at a minimum of $93.9 billion, and that figure assumes floor pricing throughout. That money arrives over the life of the contracts, not in one year.
SanDisk shares still sit 27% below their 52-week high, even with those contracts signed.
SanDisk Still Sells Other Flash At Market Prices
SanDisk sells everything outside the contracts at market prices, and management said on the August 5 call that those prices will fluctuate. Price has mattered a great deal lately. Fiscal Q4 2026 revenue rose 51% from the quarter before, and management said about two-thirds of that growth came from higher prices.
On the same call, management gave its forecast for fiscal Q1 2027. It guided revenue for that quarter to between $10.3 billion and $10.8 billion, against about $9.0 billion reported for fiscal Q4 2026. Management said it expected that growth to come from more volume and modest price increases.
Analysts on that call said the forecast seemed a bit lighter than expected, and asked why gross margin was guided lower. The guide for non-GAAP gross margin was 83% to 85%, against the 84.6% non-GAAP gross margin SanDisk reported for fiscal Q4 2026. Management pointed to mix and prudent assumptions on component costs. The top of that range, 85%, is a little above the 84.6% SanDisk had just reported.
The more volume SanDisk moves onto contracts, the less it is exposed to market prices. The number to watch is the minimum revenue under contract. A total above $93.9 billion when SanDisk reports fiscal Q1 2027 results would show customers committing more for years ahead.
Does This Mean You Should Act On SNDK?
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