Arizona State Retirement System Buys $4.57M SanDisk Stake as Q2 EPS Tops by $2.89
Arizona State Retirement System acquired 40,752 SanDisk shares in Q3 valued at $4.57M, joining several other funds adding stakes. In Q2, SanDisk generated $3.03B revenue (vs $2.67B estimate) and $6.20 EPS (vs $3.31 estimate), delivering a 61.2% sales increase and topping consensus by $2.89.
1. Data Center Revenue Surges on AI Demand
SanDisk reported a 64% sequential increase in data center storage revenue to $440 million in the second quarter, reflecting strong hyperscaler and cloud customer demand for high-performance flash solutions. This surge underscores the company’s successful pivot from consumer to enterprise storage, where higher average selling prices and longer contract durations are driving a more stable, higher-margin business mix. Management highlighted that backlog remains at record levels, with new design wins slated to ramp in the second half of the year.
2. Margins Expand Sharply with Enterprise Shift
Gross margin widened to 51.1% in Q2, up from 29.9% a year earlier, as SanDisk benefitted from higher-value enterprise SSD and NVMe offerings. The company guided third-quarter non-GAAP gross margins of 65%–67%, citing continued pricing power in a tight NAND supply environment. With capex discipline at major memory producers and strong AI infrastructure build-outs, SanDisk anticipates sustained margin expansion through 2026 as unit volumes grow and fixed costs leverage improves.
3. Earnings Guidance Points to Steep Upside
SanDisk provided Q3 non-GAAP EPS guidance of $12 to $14, a notable jump from $6.20 in Q2 and $1.22 in Q1, driven by both higher revenues and margin gains. Analysts have raised full-year EPS estimates by over 30% since the spin-off, reflecting confidence in the company’s pure-play NAND strategy. Consensus revenue forecasts for Q3 stand at $4.4–4.8 billion, implying another 40%+ quarter-over-quarter increase if achieved, cementing SanDisk’s leadership in the AI storage gold rush.
4. Institutional Investors Increase Stakes
In the third quarter, the Arizona State Retirement System initiated a stake of 40,752 shares, representing a $4.57 million investment in SanDisk’s long-term growth story. Other institutional buyers included Voya Investment Management with $8.9 million in new holdings, Praxis Investment Management at $0.5 million, Osaic Holdings at $0.3 million, Corient Private Wealth at $0.35 million, and GAMMA Investing at $0.44 million. These allocations underscore growing confidence in SanDisk’s advantaged position in the memory supply chain and its ability to deliver outsized returns as AI spending accelerates.