NAND Prices Surge: Sandisk’s Revenue Soars 372% – What Investors Need to Know

Alright, let’s get this written.

I’ve covered memory markets for more than two decades and I can tell you this: they don’t do subtlety. They boom until they break and the swings can wipe out unprepared investors. What’s happening right now in NAND flash—the storage that powers everything from smartphones to AI data centers—feels different, at least on the surface. The numbers are staggering. But as I pore over the latest earnings from Sandisk and the industry forecasts, I’m struck not by the peak, but by the changing slope of the climb. For a stock whose entire investment case is tethered to the price of a single commodity, that slope is everything.

Research firm TrendForce gave us the coordinates for this cycle. In the spring quarter, NAND flash contract prices were projected to surge 70% to 75%. For the current quarter? The same firm sees increases of just 10% to 15%. For most of the market, that’s a technical adjustment. For Sandisk, it’s the difference between a stratospheric boom and a very profitable but decelerating one. The company’s fiscal fourth quarter, ended July 3, 2026, was a case study in what the steep part of that curve looks like. Revenue hit $8.97 billion, a 51% jump from the prior quarter and a jaw-dropping 372% increase from the year-ago period. Gross margin reached 84.6%, up from a paltry 26.2% a year earlier. For the full fiscal year, revenue soared 175% to $20.25 billion, with sales to the datacenter segment—fueled by unrelenting AI demand—up 437%. This is a business that lost money on a GAAP basis in fiscal 2025. In fiscal 2026, it earned $70.88 per share on an adjusted basis.

On the earnings call, management was refreshingly blunt about the driver. They attributed roughly two-thirds of that sequential revenue growth to higher pricing with only one-third coming from increased volumes. The breakdown within those numbers tells a more nuanced story. Datacenter revenue more than doubled quarter-over-quarter to around $3 billion, a clear testament to the AI bid. But consumer revenue, which includes products for PCs and smartphones, fell 32% sequentially to $556 million. That’s the first crack in the foundation. When prices hit a certain level, buyers who have a choice start to walk away. This consumer retreat is precisely why TrendForce expects the price curve to flatten. In its July survey, the firm noted that record-high contract prices have pushed consumer markets to their tolerance limit even as AI demand continues to tighten overall supply.

So we’re shifting from a forecast of 70%-plus price growth to one of 10% to 15%. It’s crucial to understand this isn’t a forecast of price declines. It’s a forecast of slower price increases driven by demand hitting a ceiling rather than a surge of new supply—industry analysts don’t expect meaningful new capacity until the second half of 2027. But for a company like Sandisk where two-thirds of recent growth was pure pricing power, the rate of change matters more than the direction. You can already see the deceleration in the company’s own guidance. Sandisk projects fiscal first-quarter revenue between $10.3 billion and $10.8 billion. At the midpoint, that’s 18% sequential growth. Impressive by any normal standard but a steep drop from the 51% growth logged last quarter.

The immediate question for investors is whether the astronomical margins can hold. Guidance suggests they can for this quarter at least. Sandisk expects an adjusted gross margin of 83% to 85% essentially flat with last quarter and adjusted EPS of $44 to $46 up from $39.25. The real test comes further out. The stock trading around $1,600 as I write this sits about 32% below its June high of over $2,350. That puts its forward price-to-earnings ratio at roughly 7.5. A multiple that low only looks like a bargain if the earnings estimates supporting it remain intact. And those estimates require these extraordinary 80%-plus gross margins to persist deep into fiscal 2027 even as contract price growth dwindles toward the low double digits.

Sandisk has a new argument this cycle that it lacked in prior memory downturns: long-term supply agreements. The company has locked in deals with eight customers covering about half the bits it expects to ship in fiscal 2027. These contracts with a total lifetime value of $93.9 billion at their guaranteed minimum prices provide a formidable floor. They could significantly cushion the blow if open-market pricing eventually rolls over. This structural change makes this memory cycle fundamentally sturdier than the destructive ones of the past.

But let’s be clear. The other half of Sandisk’s production—the uncontracted half—still floats on that spot market price. And the forecast for how fast that price climbs has just been revised down sharply. A quarter ago, the industry’s reference projection called for 70% growth. Now it calls for 10% to 15%. This doesn’t mean the boom is over. The AI-driven demand is real and the long-term contracts are a game-changer. However, Sandisk’s current earnings trajectory was engineered on the steep part of the price curve. As that curve flattens even if nothing else goes wrong, I believe those estimates will need to be recalibrated. In the memory business, the transition from parabolic growth to mere hyper-growth is still a shift that rewrites the model. Investors betting on Sandisk now are betting that the model’s new math still adds up to a buy.

• History of memory markets
• Current trends in NAND flash
• Impact of AI demand
• Profitability and revenue growth
• Long-term supply agreements
• Market price fluctuations