What Did SanDisk’s Quarter Change For Its Stock?
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Shares of SanDisk (SNDK) fell 13.5% on October 30, the session after a fiscal Q1 2027 report that topped analysts’ forecasts. The S&P 500 lost 1.8% during the same session. Even after that fall, the stock is still up 465% over the past year. So what does SanDisk expect for fiscal Q2 2027, and how much of it comes from higher prices?
SanDisk Expects Slower Growth And Modest Price Increases
SanDisk expects revenue of $12.2 billion to $12.6 billion in fiscal Q2 2027. The midpoint of that range sits about 13% above the $11.0 billion it just reported. That is still growth, but the pace is slower than in fiscal Q1, when revenue rose 23% from the previous quarter.
Pricing mattered in fiscal Q1. Management said about 40% of the revenue increase came from higher pricing. Looking ahead, the company’s fiscal Q2 margin forecast includes only “modest” price increases. SanDisk expects an adjusted gross margin of 84.5% to 85.5%, a range that encompasses the 85.1% it reported for fiscal Q1.
The quarter itself was not a miss. Earnings of $49.51 a share topped the $47.15 consensus, and revenue came in 1.7% above the revenue consensus. The $49.51 is SanDisk’s adjusted, or non-GAAP, earnings per share. Micron Technology, Seagate Technology and Western Digital fell between 5.3% and 8.0% in the same session. The whole group lost ground, and SanDisk lost the most.
SanDisk’s Data Center Sales Grew Fastest In Fiscal Q1
Data center demand is holding up so far. SanDisk’s data center revenue reached $4.8 billion in fiscal Q1, rising 61% from the quarter before. Edge revenue, the largest line at $5.8 billion, grew 7%. Consumer revenue fell 29%, a decline management attributed to the market adjusting to higher pricing.
This is not a one-quarter jump. Fiscal Q1 revenue was 378% above the same quarter a year earlier, and it has risen in every quarter since then. Management said about half of SanDisk’s fiscal 2027 output is already committed to customers under its partnerships, along with about two-thirds of its fiscal 2028 output. The company also expects industry data center demand, measured in bits, to grow about 40% in calendar 2027.
What SanDisk’s Forecast Leaves Out
The forecast does not specify how much of fiscal Q2’s growth will come from price. Management said it normally does not break its forecast into those pieces, noting only that it expects pricing to keep rising modestly through the year.
Price also shows up in the margin. Management said higher volumes and pricing lifted the adjusted gross margin in fiscal Q1. SanDisk’s reported operating margin was 79.6% in fiscal Q1 2027, compared to 8.3% in fiscal Q1 2026.
Data center demand is still growing fast, and much of SanDisk’s output for fiscal 2027 is spoken for. SanDisk’s pricing is less settled, as management expects only modest increases. When the company reports fiscal Q2 2027 results, expected in January 2027, its adjusted gross margin will be the figure to watch against the 84.5% to 85.5% it forecast.
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