SanDisk reported second-quarter revenue of $3.4 billion, up 52% year-over-year, driven by strong SSD sales into AI data centers. Non-GAAP gross margin expanded by 480 basis points to 44.2%, reflecting improved BiCS8 wafer yields, which rose to 78% in the quarter. The company delivered non-GAAP EPS of $2.15, topping consensus by $0.18 and marking its fourth consecutive quarter of margin expansion. Management reiterated full-year guidance for revenue growth of 40%–45% and gross margin in the 43%–45% range, underpinned by continued execution on next-generation 176-layer NAND technology.

AI workloads now account for 58% of SanDisk’s total SSD bookings, up from 33% a year ago, as hyperscalers lock in multi-year supply agreements. Competitors such as Samsung and SK Hynix have prioritized high-bandwidth memory over enterprise SSDs, tightening available NAND capacity. This supply constraint has enabled SanDisk to maintain an average selling price premium of 12% compared with a year ago. The company forecasts AI-driven replacement cycles to accelerate, with server OEMs projecting NAND wear-out replacement rates rising by 30% over the next two years.

After surging 1,747% since the start of 2025, SanDisk shares fell approximately 6% on Wednesday, following a broad market rotation out of high-momentum names. Trading volume spiked by 45% versus the 90-day average, suggesting momentum traders took profits. Fundamental metrics remain robust: SanDisk ended the quarter with $4.8 billion in cash and equivalents, no net debt, and returned $600 million to shareholders through share repurchases year-to-date. With durable secular tailwinds in AI storage and a leading technology road map, long-term investors may view the pullback as an attractive entry point.