What Did SanDisk Stock Investors Miss Before The Run?
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SanDisk (SNDK) stock returned 449.0% from October 30, 2025 to November 2, 2026, while the S&P 500 returned 11.8%. Over that window, SanDisk’s business changed as well: the company sold far more flash memory, directed much of that volume to data centers, and secured higher prices. So what was public before the end of October 2025 that pointed to that change?
In May 2025, SanDisk Said It Was Cutting Supply
Releasing its fiscal Q3 2025 results on May 7, 2025, SanDisk said it had taken actions to reduce supply to match demand. Cutting supply is one way a memory maker can firm up its prices, and higher prices were later part of what changed.
The financial results offered readers little to go on. Revenue for the quarter ended March 28, 2025 was 0.6% lower than a year earlier, and SanDisk posted an operating loss, with an operating margin of minus 2.5% excluding one-time charges, including a goodwill impairment. Anyone acting in May 2025 was doing so on management’s word rather than the reported figures.
SanDisk Returned To Profit, Then Added AI Capacity
The figures turned around in fiscal Q4 2025. Revenue for the quarter ended June 27, 2025 rose 8.0% from a year earlier, and SanDisk posted an operating margin of 2.7% on the same basis. The company then said on August 14, 2025, that revenue had exceeded its own guidance.
SanDisk and its partner Kioxia began operating Fab2 at their Kitakami Plant in Japan on September 29, 2025, with the two companies saying the new fab would meet market demand driven by AI. A year later, management said the rise in demand for flash memory was driven particularly by AI. AI demand was already named a month before the window opened.
Part of the rise came early: SanDisk stock gained 500.9% between May 1 and October 30, 2025, and it still returned 449.0% over the window.
Other Memory Makers Rose, But SanDisk Ran Further
Other memory stocks rose over the same window as well, with Micron Technology returning 272.5% and Western Digital 145.6%. Investors appear to have paid up for the whole group, but SanDisk still went further.
SanDisk also kept far more profit on each sale than it had a year earlier. The company’s reported gross margin climbed from 29.8% in the quarter ended October 3, 2025 to 85.0% a year later. Management said higher pricing accounted for about 40% of the revenue increase it reported for fiscal Q1 2027, with volume behind the rest. During that quarter, revenue rose 23% from the quarter before and 378% from a year earlier.
Data centers were a large part of the business by then. Management said data center revenue accounted for $4.8 billion of the $11 billion SanDisk took in during fiscal Q1 2027. Data center sales were still growing fast, up 61% from the quarter before.
SanDisk’s Margin Has Leveled Off As Sales Grow
SanDisk stock has since given back part of its gain, falling 37.5% in the month to November 2, 2026, while the S&P 500 lost 2.3%. On November 2 alone, a cautious forecast from partner Kioxia pulled memory stocks lower, and SanDisk fell 6.6%.
The pricing evidence that built during the run has flattened out. SanDisk’s reported gross margin rose to 85.0% in fiscal Q1 2027 from 84.6% in fiscal Q4 2026, a gain of less than half a point. Management expects only modest price increases from here. The company’s adjusted gross profit margin was 85.1% in fiscal Q1 2027, and it guided 84.5% to 85.5% for fiscal Q2 2027.
Sales are still guided higher. Management expects fiscal Q2 2027 revenue of $12.2 billion to $12.6 billion, sitting above the latest quarter’s total. SanDisk is expected to report its fiscal Q2 2027 results in January 2027, and gross margin is the measure to watch.
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