SanDisk Forecasts Q3 $4.8B Revenue as Q2 EPS Surges 404%
SanDisk delivered fiscal Q2 revenue of $3.03 billion, up 61% year-over-year, and non-GAAP EPS of $6.20, a 404% increase, with net income rising to $803 million. It forecast Q3 revenue of $4.4–4.8 billion and adjusted EPS of $12–14, driven by a 64% sequential gain in datacenter sales.
1. Record Second-Quarter Performance Driven by AI Infrastructure
SanDisk reported fiscal Q2 revenue of $3.03 billion, up 61% year-over-year, and non-GAAP earnings per share of $6.20, a 404% increase compared with the prior-year period. Datacenter sales grew 76% year-over-year to $440 million, while edge and consumer segments each delivered over 50% annual revenue gains. Gross margin expanded to 51.1%, up 18.6 percentage points from Q2 2025, reflecting strong pricing power as memory shortages persist. Operating income surged 386% year-over-year to $1.13 billion, underlining SanDisk’s ability to convert robust top-line growth into substantial profit expansion.
2. Third-Quarter Outlook Outpacing Street Estimates
Management guided Q3 revenue between $4.4 billion and $4.8 billion, representing growth of nearly 50% at the midpoint versus the year-ago quarter. Non-GAAP diluted EPS is forecast at $12.00 to $14.00, more than double consensus of $5.42. Projected gross margin of 65.0% to 67.0% exceeds the 49.3% analysts had modeled, driven by continued AI-driven pricing strength and favorable product mix. Supply-chain agreements secured through late 2026 ensure capacity to meet accelerating demand from hyperscale data-center operators.
3. Analyst Upgrades and Valuation Implications
Following the blowout results and optimistic guidance, four of five analysts covering the company reaffirmed buy ratings, with consensus target implying approximately 35% upside to current levels. Raymond James upgraded to Outperform, citing structural supply constraints in NAND memory and SanDisk’s leadership in high-density storage modules. Bank of America raised its price target by over 25%, forecasting sustained margin expansion as average selling prices remain elevated relative to historical norms.
4. Strategic Positioning in a Tight Memory Market
Since spinning off in February 2025, SanDisk has captured a leading share of the flash storage component market. The company’s differentiated R&D investment in advanced 3D NAND architectures positions it to address both enterprise SSD and AI accelerator workloads. A recently extended supply contract with a top five cloud provider secures priority access to critical wafers, insulating SanDisk from competitor rationing and enabling disciplined revenue growth over the next two fiscal years.