SanDisk shares fell approximately 6% on Wednesday, reversing part of the 1,747% advance registered since the start of 2025. The decline marks the first significant reversal for a stock that had been riding a wave of momentum driven by blockbuster quarterly results and runaway demand for flash memory in AI data centers. Trading volumes spiked 35% above the 30-day average on the pullback day, suggesting profit-taking by short-term holders after rapid gains.

In its most recent quarter, SanDisk delivered revenue of $3.03 billion, up 61% year-over-year, and non-GAAP EPS of $6.20, a 404% increase from the prior-year period. Gross margins expanded to 50.9% from 32.3% a year earlier, reflecting a favorable product mix shift toward higher-margin enterprise storage. For the third quarter, management guided revenue to a range of $4.4 billion–$4.8 billion, with gross margins projected between 64.9% and 66.9%, and non-GAAP EPS of $12–$14, underscoring continued leverage as AI workloads ramp.

Data center revenue climbed 64% sequentially to $440 million in the latest quarter, accelerating SanDisk’s pivot from commodity flash to enterprise solutions. Year-over-year gross margin for the segment jumped to 51.1% from 29.9%, driven by strong uptake of new solid-state drives designed for AI training and inference workloads. Management indicated that large cloud service providers have locked in supply agreements extending into 2028, reinforcing visibility for multi-year growth in this high-value market.