$SanDisk Corp.(SNDK)$ crashed 14%, but had the best earnings results ever.
Here's why it'll 5x-10x from here:
12 reasons:
1. They beat the high end of their own guide on everything.
Revenue $8.97B. Gross margin 84.6%. EPS $39.25 vs $34.51 consensus.
Record revenue, record margin, record EPS. All three above guidance.
2. The "bad" guidance is +17% revenue growth.
Q1 FY27 guide: $10.3–10.8B revenue, $44–46 EPS.
The Street sold a stock guiding to another sequential record because the midpoint missed a number some analyst typed into a spreadsheet.
3. You're paying ~7x forward earnings.
$45 EPS × 4 = ~$180 annualized run rate. Stock around $1,270.
Seven times. For a business compounding revenue 372% YoY.
4. $93.9B in minimum contracted revenue at FLOOR pricing.
That's the worst case. 8 customers signed across
Datacenter and Edge, 4+ year weighted average duration.
For context, they did $20B in all of FY26.
5. RPO of $59.8B at quarter end. $91.1B including deals signed after.
They signed 5 more agreements 3 new customers, 2 expansions. Two closed after the quarter even ended.
Demand is not slowing.
6. $16.5B in financial guarantees cash deposits and instruments.
Customers are wiring money to lock supply. That's not a handshake. That's collateral.
7. Half of FY27 bits are already committed. Two-thirds of FY28.
This is the whole thesis. $SNDK is not a spot NAND price bet anymore.
The market is still valuing it like one. That's the mispricing.
8. Datacenter revenue +1,298% YoY.
$2,977M in the quarter, up 103% sequentially. FY26 revenue up 437%.
Datacenter bits went from 12% of mix to 38% in four quarters. They expect Datacenter to go from ~30% of TAM in CY25 to ~50% in CY26.
9. Margins are contracted, not cyclical.
84.6% gross margin, guided to 83–85% next quarter. Opex was $484M against $7.1B in operating income.
Revenue +372% YoY. Opex +20%. That operating leverage is absurd.
10. This is an asset-light cash machine.
Cash capex was $153M 1.7% of revenue. Full year guided to ~6% gross.
$5.0B adjusted free cash flow in a single quarter while barely spending anything.
11. They're buying the stock aggressively.
$4.5B repurchased in Q4 alone roughly 89% of adjusted FCF.
$15.5B still authorized. Share count already ticking down 157M → ~155M guided.
They are shrinking the float into a selloff.
12. The TAM is going vertical and Edge hasn't even turned yet.
NAND market >$300B in CY26 (3x YoY), $500B in CY27.
Bits stay on allocation beyond CY2027 demand exceeds supply.
And PCs/smartphones the majority of revenue don't return to growth until CY2027. That leg is still in front of us.
The bear case is "pricing was two-thirds of the sequential growth, so this is peak cycle."
But you can't have a peak cycle when 2/3 of your FY28 bits are locked under multi-year contracts with floors, ceilings, and $16.5B of customer cash sitting as collateral.
That's the entire point of the NBMs. They engineered the cyclicality out.
Record quarter. 7x forward earnings. $15.5B buyback. Contracted revenue 4x this year's total sales.
I'm not selling this. I'm adding.
Comments