Sandisk Corporation (NASDAQ:SNDK) shares rallied 10.5% on Friday, closing at $1,718.96, as investors cheered robust NAND pricing and the company's stellar fiscal fourth-quarter results. The surge came even as broader U.S. markets slipped following a stronger-than-expected jobs report, highlighting the strength of the memory sector.
Intraday Performance
The stock traded between $1,581.00 and $1,736.50, with volume reaching 12.15 million shares. The rally was part of a broader memory-chip advance, with the PHLX Semiconductor Index climbing 2.7% and Micron Technology (NASDAQ:MU) gaining 4.2%. Sandisk's move came without any new corporate filings, suggesting the uptick was driven by sector momentum and existing fundamentals.
Earnings and Margin Highlights
Sandisk's fiscal fourth-quarter revenue jumped 51% sequentially to $8.965 billion, driven primarily by higher prices, which accounted for about two-thirds of the growth. The company reported a GAAP gross margin of 84.6%, a figure that underscores the pricing power in the NAND market. For the current quarter, Sandisk guided revenue to a midpoint of $10.55 billion and non-GAAP diluted EPS of $45.
Annualizing that EPS run rate yields $180, putting the stock at roughly 9.6 times that figure. However, this multiple assumes the strong quarter repeats, a scenario management has not forecast. The market appears cautious, as shares remain 27% below their 52-week high of $2,354.39.
Capital Returns and Business Mix
Supporting the stock is a robust capital return program. Sandisk expanded its share repurchase authorization by $14 billion, bringing total capacity to $15.5 billion. CEO David Goeckeler highlighted datacenter as a key growth pillar, with segment revenue of $2.977 billion in Q4, doubling sequentially. Edge revenue reached $5.432 billion, while consumer revenue fell 32% to $556 million, reflecting a shift toward enterprise and AI-driven demand.
Risks and Outlook
The memory industry is notoriously cyclical, and Sandisk's annual report cites risks from average selling price volatility, demand fluctuations, and customer deployment timing. The company's manufacturing partnership with Kioxia Corporation remains a key dependency. Investors will be watching the next quarterly report to see if the earnings strength is durable or driven by temporary price scarcity. A drop in gross margin would undermine the current valuation multiple.
Friday's rally underscores the market's optimism about NAND pricing, but sustainability remains the key question. With the stock trading at a significant discount to its high, the market is pricing in some caution. The coming quarters will be critical in determining whether Sandisk can maintain its impressive margin and revenue trajectory.
