SanDisk Corp. Stock Volatile After AI-Driven Surge and Soft Guidance

Shares of SanDisk Corp. experienced volatility on August 7 after the company issued near-term revenue guidance that fell short of investor expectations. This follows a massive 2,800% stock price increase over the last 12 months, fueled by generative AI infrastructure spending. The company reported fourth-quarter revenue of $20.2 billion, a 175% year-over-year increase, with data center demand rising 437% due to the necessity of solid-state drives and NAND flash memory for large language models.

Wall Street analysts responded to the softer guidance with mixed price target revisions. Jefferies Group reduced its target to $1,750 from $3,000, and Evercore ISI lowered its target to $2,800 from $3,100, though the latter noted that projected gross margins of 83% to 85% exceeded consensus. Morgan Stanley and Wedbush maintained positive ratings, with Wedbush suggesting the company may be adopting a conservative approach to its pricing guidance.

Despite the short-term pressure, analysts highlighted improved demand visibility through five new long-term agreements covering over half of fiscal 2027 NAND bit shipments. However, long-term risks persist, including potential memory shortages lasting until 2030 and rising competition from Chinese producers such as ChangXin Memory Technologies and Yangtze Memory Technologies.