Why Sandisk Stock Was on Fire This Week
Key Points
The company more than tripled its fiscal third-quarter revenue.
It's taking full advantage of very strong demand for storage solutions.
Sandisk (NASDAQ: SNDK) was quite a star on the stock exchange over the past few trading sessions, and it wasn't just because of its own impressive quarterly earnings release published on Thursday. According to data compiled by S&P Global Market Intelligence, the company's stock was up by more than 11% week to date as of early afternoon Friday.
Storage of value
Sandisk's third-quarter fiscal 2026 revenue more than tripled year over year to $5.95 billion. On the bottom line, under standards not in accordance with generally accepted accounting principles (GAAP) the company dramatically flipped to a profit of nearly $3.68 billion ($23.41 per share) from the year-ago loss of $43 million.
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The analyst consensus for revenue was only $4.73 billion, while those pundits considerably underestimated non-GAAP (adjusted) profitability with an average forecast of $14.66 per share.
During the quarter, Sandisk's revenue from all three of its customer segments -- data center, edge computing, and consumer -- rose, in the first two cases, precipitously. Data center advanced 645% year-over-year to almost $1.47 billion, while edge contributed $3.66 billion, up 295%. Consumer brought up the rear with "only" 44% growth to $820 million.
Sandisk also proffered guidance for its current (fourth quarter) of $7.75 billion to $8.25 billion for revenue, and adjusted net income of $30 to $33 per share. The low ends of both those ranges are, unsurprisingly, well above the average pundit projections.
The power of a peer
Sandisk's stock price rise was helped by a similarly impressive performance from its peer and rival, Seagate Technology. That company reported its own fiscal third-quarter results during the week, and as with Sandisk, its revenue and profitability surged.
So it's clear that storage is a white-hot area of activity and growth just now, not least because of the needs of resource-heavy artificial intelligence (AI) technology. While I wouldn't expect Sandisk (or Seagate, for that matter) to continue experiencing triple-digit improvements, I think the storage sector as a whole is a fertile one for investors now.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.