SanDisk Stock (SNDK) Hits New Highs – Expectations Elevated Into Earnings

SanDisk’s stock (SNDK) is a real breakthrough story, with gains of 95.68% YTD bringing the cumulative 1 year return to an almost impossible sounding 1395%. The company reports Q2 2026 results on after market close today, with fresh highs of $546.36 coming on a day where the stock sits 2.3% higher ahead of the print.

Expectations are unsurprisingly raised, with the consensus at $3.62 adjusted EPS on $2.70B revenue.

The setup reflects a fundamental shift in the earnings narrative. SanDisk moved from “recovery” to “repricing” in FQ1 2026, when management guided the next quarter to a $3.00-$3.40 EPS range, implying a profitability step-up that forced analysts to recalibrate the forward curve.

The stock surged 15.3% on that report as investors absorbed the margin trajectory.

What the result will determine is whether the AI storage thesis can sustain a valuation that implies structural rather than cyclical demand growth. J.P. Morgan’s Harlan Sur has set a $235 target, implying 53% downside from current levels, citing valuation concerns in a notoriously cyclical sector.

SanDisk headquarters illuminated at twilight as the company prepares to report fiscal Q2 2026 results

Consensus Estimates

Consensus expectations have moved beyond management’s guided midpoints on both revenue and EPS. The Street is modeling $2.70B revenue versus the $2.60B midpoint, a 3.8% premium. On EPS, consensus at $3.62 sits 13.1% above the $3.20 midpoint. This positioning implies analysts are underwriting either better-than-expected margins, revenue at the high end of the guided band, or both.

Management Guidance & Commentary

“We are experiencing unprecedented demand for high-capacity SSDs driven by AI infrastructure and data center expansion. Supply constraints are expected to persist through 2026, supporting our pricing discipline and margin expansion trajectory.”

Management’s November guidance established the framework for the current quarter’s expectations. The company projected revenue of $2.55B-$2.65B and adjusted EPS of $3.00-$3.40, implying a significant profitability step-up from FQ1’s $1.22 EPS. The guidance also included a gross margin band of 41%-43%, reflecting both improved NAND pricing and better product mix as datacenter demand strengthens.

The gap between management’s midpoint guidance and current Street expectations creates a specific setup where consensus revenue at $2.70B implies the Street expects volume upside or mix shift beyond what management embedded in the $2.60B midpoint.

Analyst Price Targets & Ratings

Wall Street sentiment is mixed, with 65% of analysts rating shares a Buy or Strong Buy, but the consensus target of $235 implies 53% downside from current levels. This disconnect reflects the tension between the AI storage narrative and traditional memory sector valuation frameworks.

Sector & Peer Comparison

SanDisk trades at a 205x trailing P/E multiple, an extreme premium to the memory sector. Micron, the closest U.S. comparable, trades at 18.3x despite higher profit margins and a more diversified product portfolio. The valuation disconnect is most visible in the forward P/E comparison, where SanDisk’s 20.5x forward multiple implies sustained triple-digit earnings growth.

NAND flash memory production where supply constraints have driven pricing power across the sector

Earnings Track Record

SanDisk has beaten consensus estimates in each quarter since becoming a standalone company, with an average surprise of 223%. The pattern shifted in FQ1 2026, when the 22% beat represented meaningful dollar upside on a higher base, marking the inflection where forward guidance became the primary driver of estimate revisions.

Post-Earnings Price Movement History

Post-earnings reactions have been driven by forward guidance rather than backward results. The FQ1 2026 report illustrates this dynamic: the stock surged 15.3% despite a modest 22% EPS beat because management’s guidance implied a significant profitability step-up that recalibrated the forward earnings curve.

Expected Move & Implied Volatility

The options market is pricing a 12.5% move in either direction, reflecting the stock’s elevated volatility profile. Implied volatility at 85% sits in the 78th percentile, indicating options traders see above-average uncertainty around the event, consistent with a stock trading at 205x earnings where any guidance disappointment could trigger significant multiple compression.

AI data center infrastructure driving unprecedented demand for high-capacity storage solutions

Expert Predictions & What to Watch

Key Outlook: Neutral with Downside Bias

The central constraint is valuation. At 205x trailing earnings, SanDisk trades at a premium that implies structural rather than cyclical demand growth. For the current valuation to hold, the company must prove that AI-driven storage demand represents a multi-year structural shift.

Key Metrics to Watch

The upcoming report will test whether SanDisk can convert AI-driven storage demand into sustained margin expansion at a pace that justifies a 205x P/E multiple. The Street has already moved beyond management’s guided midpoints, creating a setup where meeting guidance may not be sufficient to prevent profit-taking.

The key analytical question is whether supply constraints and hyperscaler partnerships represent a multi-year structural advantage or a cyclical tailwind that will normalize as capacity comes online. A result that validates extended supply discipline and provides concrete hyperscaler revenue visibility could sustain the valuation premium, while any suggestion of normalization would likely trigger re-rating toward peer multiples.