Live: Will Sandisk Stock Rally After Tonight’s on Q3 Earnings

Here’s a mind-blowing stat!

SanDisk reported 78.4% gross margins this quarter.

Wall Street expects NVIDIA will report 75.1% gross margins when it reports its Fiscal Q1 earnings.

That is to say, SanDisk currently has more pricing power than even NVIDIA. That’s just a remarkable stat.

We’re reviewing SanDisk’s conference call and the first question Wall Street asks directly addressed one of the key concerns facing the company: are price increases beginning to slow?

Here’s how CEO David Goeckeler and CFO Luis Visoso responded to the question:

Mark Newman Bernstein Institutional Services LLC, Research Division

Congrats on another great quarter. A couple of just quick questions here. So the EPS guidance you’ve given, $30 to $33, I mean these are all fantastic numbers. It does imply that the raise of price increase is slowing a bit into the the current quarter. And I just wondered if that is either being conservative on your side because obviously, we’re still quite early in the quarter? Or is that related to some of these very, very long-term agreements that you’ve signed. And with regards to the long-term agreements, I believe you mentioned about 1/3 of bids for FY ’27 in some kind of long-term agreement. I’d like to ask to what degree is price fixed in the coming quarters, just so I can get a kind of sense for that.

David V. Goeckeler Chief Executive Officer

Mark, it’s good to hear from you, and thanks for the comments. So first on next quarter in pricing, so we don’t really guide pricing. But I think you saw in FQ3 rather extraordinary pricing acceleration across the business. So we’re very happy about that. And you’re right, it’s early in the quarter, and it’s an extremely dynamic market. So it pays to be a bit conservative when you’re going down that path. But we’re very confident in the numbers.

The second part on the agreements, I’ll make a few comments and Luis will have something to say as well. I think you were asking about pricing being fixed. So these agreements are really tailored to individual customers. So they have different elements depending on the customer, it depends on the length of the agreement that really gives us some assurance on consistency of demand, which is really what we need. And again, a lot of this is — I’ve talked about this in the past, we need to get our customers’ business model and our business model aligned.

We run a fab. We have very consistent output. We need very consistent consumption. And I think the primary — one of the major attributes of these agreements is they give us that. And our customers have — they understand the dynamic very clearly when we talk it through. It’s one of the reasons why these agreements don’t just happen overnight. It’s not just about prepaying for a couple of quarters’ worth of supply. This is about establishing up to a 5-year agreement on supply that’s very consistent quarter-over-quarter.

And as we said, there’s financial instruments in place that if that consumption does not happen on that very predictable timeframe, then there’s financial commitments that come to us immediately. So they are backed up and they’re very, very strong. The pricing, like I said, it’s set up where there’s fixed elements, there’s variable elements. Maybe I’ll let Luis talk about it in a little more detail.

Luis Visoso Chief Financial Officer

I just want to reinforce what David was saying. These models are here to deliver durable more predictable, more attractive, more consistent financial results. So they’re very good. And frankly, it’s a win-win for us and for our customers. We provide supply, they provide demand and we have visibility for many years all the way to 5 years. So we’re very happy about that. I guess you’ve never heard about us talk about RPO, or remaining performance obligations in this business, and we started to talk about that, and you will see it in our 10-Q, as we mentioned, about $42 billion of RPO in this business.

So we’re very happy about that. The pricing, as we mentioned, it’s a combination of fixed and variable to address your question directly. The shorter time you are in within the contract, the more fixed it is, the longer out you go out, there would be more components of variable. So you could assume that most of the pricing that we’re seeing in the very short term is mostly fixed. And then as you go out, there is a little bit more variable for us to capture upside and for our customers to capture some upside if prices were to go down.

As we’ve noted, the key concern facing SanDisk’s stock is how durable the current memory boom is. Here’s what SanDisk’s (SNDK) CEO David Coeckeler had to say about how the company is using partnerships to create structurally higher earnings.

David V. Goeckeler Chief Executive Officer

“Good afternoon, and thank you for joining Sandisk’s fiscal third quarter earnings call. We delivered another strong quarter with excellent performance across all key metrics, reflecting the strength of the Sandisk franchise. Before turning to our end markets, I’d like to provide an update on a priority we previously outlined. Last quarter, we were engaged in discussions with customers on multiyear supply partnerships. What we refer to as new business models or NBMs. I am pleased to share that we have successfully advanced those conversations with 5 multiyear partnerships signed so far.

These partnerships are structured to lock in committed supply for our customers and committed financials for Sandisk. Our customers’ commitments are backed by firm financial guarantees. These partnerships support durable structurally higher earnings and a significantly more predictable and less cyclical business for Sandisk. We believe this marks a fundamental evolution of our business, which is centered on deeper customer alignment, enhanced visibility and long-term value creation. These MBMs reflect the strategic value of our world-class NAND technology, which is built on decades of innovation. The investment we’ve made in R&D and manufacturing, including tens of billions of dollars in cumulative CapEx and IP have built the foundation for a powerful new business model in which we manage the full stack from front-end manufacturing through chip and system level design to final back-end assembly and test.

Both the extension of our joint venture with Kioxia and the supply agreement for DRAM following our investment in Nanya, further strengthen our supply chain resiliency. This leverage is enabling us to drive stronger customer engagement, allowing long-term conversations with partners who value technology performance and long-term supply assurance. With increased engagement in the optionality across the portfolio, we can optimize our end market mix more effectively. Together, these transformations have resulted in a step change in what we believe to be sustainable gross margins, free cash flow generation and earnings power in a market that we expect to grow in the double digits for the foreseeable future.

Data center is a clear example of this strategy in action with revenue growing 233% sequentially. This milestone reflects years of operation and our deliberate shift toward what is now the most strategic and fastest-growing end market. While we have made substantial progress, there is significant growth opportunities ahead driven by the fundamental shift in underlying infrastructure requirements of artificial intelligence. “

Well, SanDisk had rebounded before its call. Shares were down 2.6%. However, selling pressures have resumed. Shares are now down 6%.

We’ll provide some updates from their ongoing call shortly.

Well, it was another blowout for SanDisk. The company delivered EPS of $23.41 against expectations of $14.42.

However, with shares up more than any other stock in the S&P 500 headed into earnings, a blowout was priced in.

Shares initially dropped 10%, but are now rallying back. They’re down about 2.6% right before the company’s conference call starts.

Overall, while shares are down, there is little to be disappointed with in this report. EPS is outstanding, guidance for next quarter is strong, and all signs point to memory pricing staying elevated for an extended period.

We’ll see if the rebound continues during the company’s call. The number one factor that impacts SanDisk’s share price is how durable Wall Street believes the current demand environment is. 

Wall Street expects EPS to rise to $127.09 next fiscal year and then slightly drop in 2028 to $125.99. If SanDisk provides commentary that leads the Street to believe pricing trends can continue fruther into the future on tonight’s call, the stock will continue rebounding.

Conference Call Setup

The Q3 FY26 call begins at 4:30 PM ET via webcast at investor.sandisk.com, with CEO David Goeckeler hosting.

Top 5 Questions for Management

1. Is the 78.4% gross margin sustainable into FY27?
2. Who are the 5 NBM customers, and what are duration and volume terms?
3. How durable is Datacenter +645% YoY growth?
4. What drove the Consumer segment’s 10% sequential decline?
5. Capex plans beyond Q3’s $45M, plus buyback sizing?

Clarify From the Release

NBM commitment structure, Kioxia capacity allocation, BiCS8 ramp timing, and HBF/AI inference roadmap.

Red Flags

Hedged NAND pricing language, hyperscaler concentration disclosures, tariff exposure, and any softening in the $7.75B–$8.25B Q4 revenue range commentary.

What the Sell-Side Missed

The biggest blind spot was margin structure. Gross margin came in at 78.4% versus 22.5% a year ago, a step-function shift no model anticipated. Datacenter revenue surged 645% YoY to $1.467 billion, and Edge climbed 295% to $3.663 billion.

Three factors drove the miss: analysts modeled gradual NAND recovery rather than the AI-driven pricing spike; new multi-year firm-commitment contracts (5 NBM agreements) weren’t in sell-side frameworks; and Sandisk‘s (NASDAQ:SNDK) February 2025 separation from Western Digital left limited standalone history.

Consumer was in line, at $820 million, up 44%.

Implications for Forward Estimates

Q4 guidance of $30.00 to $33.00 EPS sits well above $22.70 prior consensus. Expect another wave of upward revisions, with the streak now at four consecutive EPS beats and surprise magnitudes still expanding.

Tonight’s call is now the main event. Management’s Q4 outlook of $7.75-$8.25B in revenue and $30-$33 EPS already cleared the bullish thresholds laid out earlier, topping consensus of $6.49B and $22.70. Yet shares slipped 6% intraday before stabilizing near $1,097.53, a sign the buy-side bar ran higher than the published numbers.

Investors now want color on margin durability after the 78.4% Q3 gross margin, BiCS8 bit-mix exiting FY26, and whether a third hyperscaler qualification lands in CY26. CEO David Goeckeler’s conservative cadence (a 74.97% EPS beat last quarter) suggests even this raise may understate run-rate.

Bearish risk: cautious NAND pricing language or pulled-forward 2028 supply normalization. With shares up 348.31% YTD, tone matters as much as the numbers.

SanDisk just delivered a massive Q3 2026 beat across the board:

• Revenue came in at $5.95 billion, beating the $4.70 billion consensus by about $1.25 billion.
• EPS was $23.41 versus $14.50 expected.
• Gross margin reached 78.4%, and operating income came in at $4.22 billion versus a $2.70 billion estimate.

Plus, the outlook was strong. The stock is up over 3,100% in the past year, and over 275% just in 2026.

Sandisk Q3 earnings are out. Here’s what the company reported:

• Revenue: $5.95B vs $4.70B est, massive beat
• Adjusted EPS: $23.41 vs $14.50 est
• Adjusted gross margin: 78.4%
• Adjusted operating income: $4.22B vs $2.70B est

Q4 guidance blowout:

• Revenue $7.75-$8.25B vs $6.49B est
• Adjusted EPS $30-$33 vs $22.70 est.

Shares fell initially fell 6% on the news.

With Polymarket pricing a 97.05% probability of a beat versus the $14.34 consensus, tonight’s headline is largely priced in. The real catalyst is SanDisk‘s (NASDAQ:SNDK) Q4 FY26 outlook.

CEO David Goeckeler has guided conservatively and consistently exceeded targets, beating Q2 EPS guidance of $3.00–$3.40 with a $6.20 actual result. Investors want clarity on datacenter trajectory, BiCS8 ramp, hyperscaler qualifications, and gross margin expansion beyond the 65–67% Q3 range.

Bullish guide: Q4 revenue above $5B, EPS above $14–$15, margins above 67%, plus a third hyperscaler win. Bearish guide: revenue flat or below $4.8B, softer margins, or cautious NAND pricing commentary signaling a peak. With shares up 348.31% YTD, anything short of an aggressive raise risks a sharp unwind.

SanDisk heads into tonight’s report with momentum but also high expectations. The company has become a direct beneficiary of the AI infrastructure buildout, supplying the high-speed storage that sits alongside GPUs in modern data centers. As hyperscalers scale capacity, demand for NAND flash and SSDs has accelerated, driving a sharp rebound in both pricing and volumes. That shift has turned what was once a deeply cyclical memory story into one more closely tied to secular AI spending.

That said, the setup is far less forgiving at current levels. The Street is already modeling aggressive growth, with consensus EPS already above management’s own guidance range, which suggests little room for disappointment. With shares up more than 275% year to date, investors will likely focus less on whether SanDisk beats and more on whether margins, hyperscaler traction, and forward guidance can support the next leg higher.