Shares of Sandisk Corporation (NASDAQ:SNDK) advanced 1.9% to $1,234.91 in late trading on Monday, as analysts revisited the sharp selloff that followed the company's fiscal fourth-quarter earnings report. The rebound comes after a volatile week in which the stock fell sharply despite beating expectations, highlighting the market's shifting focus on forward guidance and margin trends.
Argus Research upgraded Sandisk to Buy with a new price target of $1,600, implying roughly 29.6% upside from Monday's late-session price. The upgrade was among several analyst actions that helped stabilize sentiment. Cantor Fitzgerald reiterated its Buy rating with a $2,900 target, while Goldman Sachs maintained Buy with a $2,200 target. On the more cautious side, Wells Fargo and RBC Capital both hold Hold ratings with targets of $1,400 and $1,300, respectively.
The company's first-quarter revenue guidance of $10.30 billion to $10.80 billion has a midpoint of $10.55 billion, which represents a 17.7% sequential increase from the fourth quarter. However, the guided gross margin of 83% to 85% (midpoint 84%) is 60 basis points below the fourth quarter's actual 84.6%, a factor that investors are weighing as they assess the sustainability of the company's pricing power.
Sandisk's fourth-quarter results were robust. Revenue climbed 51% sequentially to $8.965 billion, while non-GAAP gross margin expanded by 6.2 percentage points to 84.6%. Non-GAAP operating income surged 68% to $7.104 billion, and non-GAAP diluted EPS rose 68% to $39.25. Notably, two-thirds of the revenue growth was driven by higher prices, underscoring the strength of the NAND flash memory pricing environment.
Datacenter sales were the standout performer, more than doubling sequentially to $2.977 billion and accounting for one-third of total revenue, up from roughly a quarter in the prior quarter. Edge revenue grew 48% to $5.432 billion, while consumer revenue fell 32% to $556 million. This mix shift toward datacenter and AI infrastructure is a key part of the company's growth narrative. CEO David Goeckeler highlighted that Sandisk had "established datacenter as a key growth pillar, and deepened our customer partnerships," noting the addition of five long-term customer agreements during the quarter.
Despite the strong operational performance, the market's reaction to the earnings was severe. Sandisk shares fell 13.3% on Thursday even though guidance exceeded consensus estimates compiled by LSEG. Western Digital (NASDAQ:WDC) dropped 19.1% in the same session. Divya Mathur, a portfolio manager at ClearBridge Investments, commented that the volatility "appears disconnected from any material change in long-term fundamentals." Peers stabilized on Monday, with Western Digital trading higher and Micron (NASDAQ:MU) and Seagate (NASDAQ:STX) near flat.
The company's balance sheet provides additional support. Sandisk expanded its share repurchase authorization by $14 billion, leaving $15.5 billion available, which represents about 8.5% of the company's late-session market value. This move signals management's confidence in the business and provides a floor under the stock.
However, risks remain. NAND prices can reverse quickly, and a slower pricing cycle, weaker AI spending, or a larger margin decline would challenge both the earnings trajectory and analyst price targets. The next major test comes on August 13, when Sandisk hosts its investor day. The company must demonstrate that datacenter growth and long-term customer agreements can outlast the current pricing surge, which is central to the bull case.
As the market digests the earnings selloff and subsequent rebound, the wide range of analyst targets — from $1,300 to $3,050 — reflects the uncertainty around NAND pricing durability. With a consensus of 14 Buy and two Hold ratings, Wall Street remains broadly positive, but the volatility underscores the stakes ahead of the investor day.
