Sandisk Corporation (NASDAQ:SNDK) shares fell about 8% Friday morning despite reporting first-quarter results that beat Wall Street’s expectations, as investors weighed strong data center demand against the stock’s sharp rise and concerns about the broader memory market.
Shares have gained about 460% year to date, raising expectations for the flash memory maker and leaving little room for disappointment. This decline also coincided with a broader sell-off in memory stocks, with Western Digital down 8%, Seagate down 7% and Micron down 6%.
Sandisk reported revenue of $11.03 billion for the quarter, up 378% from a year earlier and above analysts’ consensus estimate of $10.64 billion.
Adjusted earnings per share came in at $49.51, compared with expectations of $46.22. Adjusted gross margin reached 85.1%, up 55.2 percentage points year-over-year and ahead of forecast of 84.1%. Adjusted operating profit came in at $8.87 billion, beating the estimate of $8.44 billion.
Data center revenue climbed to $4.80 billion, reflecting a 61% sequential increase as demand for memory used in AI infrastructure continued to strengthen.
Edge revenue increased 7% from the previous quarter to $5.83 billion, while consumer revenue declined 29% to $397 million, highlighting uneven conditions across the company’s markets.
For the second quarter, Sandisk expects revenue between $12.2 billion and $12.6 billion, above analysts’ consensus of $12.18 billion.
It expects adjusted earnings per share of $55 to $57, compared with estimates of $53.19, and an adjusted gross margin of 84.5% to 85.5%.
The company also announced an eight-for-one forward stock split, effective November 19, 2026.
Sandisk repurchased about 3.2 million shares for $5 billion during the first quarter. Wedbush said the company has $10.5 billion remaining under its stock repurchase authorization.
The brokerage maintained its outperform rating and increased its earnings per share estimates for fiscal 2027 and 2028 to $236.41 and $304.20, respectively, from $228.52 and $268.44. He also called Sandisk’s pricing assumptions conservative.
Jefferies highlighted the continued strength of demand in data centers, forecasting that the segment will account for more than 55% of the NAND market in 2027, and that demand for bits is expected to grow by approximately 40%.
However, the brokerage noted slower trends in the edge and consumer markets, highlighting the importance of data center demand to Sandisk’s growth prospects.
Friday’s share price decline suggests investors are looking beyond the latest results to assess how much additional growth is already reflected in the stock’s valuation.
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