Did The Market Read SanDisk Stock Right?
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Shares of SanDisk (SNDK) climbed 639.3% in the twelve months to October 27, 2026, outpacing a 13.6% rise in the S&P 500 over the same period. The flash memory maker disclosed in its August 5, 2026, quarterly report that it had signed multiyear supply contracts with eight data center and edge customers. A stock rally of that size can run ahead of the underlying business or simply reflect it. So did SanDisk’s earnings keep pace with its share price? They did: earnings swung from a loss to a large profit, and even after the rally the shares trade below the market’s multiple.
SanDisk’s Shares Still Trade Below The Market’s P/E
The company generated $11.4 billion in earnings over the four quarters to July 3, 2026, rebounding from a $1.64 billion loss in the four quarters prior. Even after their rise, the shares trade at 16.8 times trailing earnings, coming in below the 22.6 multiple for the S&P 500. Because SanDisk was losing money in mid-2025, it had no meaningful P/E at all during that period.
Industry peers advanced as well. Micron gained 323% over the same dates, Western Digital rose 201% and Seagate added 192%, though SanDisk outran all three. News reports in December 2025 and April 2026 linked the company’s performance to rising NAND prices and demand for storage in AI data centers.
SanDisk Went From Thin Margins To Very Wide Ones
SanDisk retained 8.3% of its revenue as operating profit during fiscal Q1 2026, which ended October 3, 2025. That margin then expanded in each of the following three quarters, reaching 78.5% in fiscal Q4 2026. The company posted $8.97 billion in revenue for that fourth quarter, representing a 371.6% increase from a year earlier.
Data center stands as the fastest-growing end market for SanDisk, according to management. Revenue there hit $5.15 billion in fiscal 2026, up 437% from the prior year. The company has already locked in a portion of that demand. Management said the contracts signed so far will secure at least $93.9 billion of revenue at floor prices, compared with the $20.2 billion of sales recorded in fiscal 2026. Those contracts run for a weighted average of more than four years.
Management’s guidance points to a gross margin close to the latest quarter’s level. Its forecast for fiscal Q1 2027 calls for an adjusted gross margin of 83% to 85%, while the adjusted figure SanDisk reported for fiscal Q4 2026 was 84.6%.
Much Of SanDisk’s Latest Growth Came From Higher Prices
Higher pricing drove about two thirds of the revenue growth from fiscal Q3 to Q4 2026, while increased volumes accounted for the remaining one-third, management said. As a result, SanDisk’s results remain exposed to the price of NAND, even with the supply contracts in place.
Shareholders have already seen how far the shares can fall. The stock closed at $1,304.84 on October 27, dropping from a one-year high of $2,335.00 on June 25, 2026. Based on the same twelve months of earnings, the P/E was 29.2 at the end of June. The lower multiple at the October 27 close therefore comes from the lower price, not from higher profit.
SanDisk still sells a portion of its output at market rates. The contracts are expected to cover more than half of the flash output SanDisk sells in fiscal 2027, and management said prices on the rest will move with the market. When the company releases its fiscal Q1 2027 report, expected on October 29, the number to watch is how much of its revenue growth comes from price rather than volume.
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