Don’t Ignore Sandisk: This Upcoming Catalyst Could Send SNDK Stock Higher

After an impressive rally, Sandisk (SNDK) has given back a significant portion of its gains. SNDK stock has fallen more than 45% from its peak, including a sharp 44% decline in the past month, as investors reassess the memory chip market.

Several factors have led to this strong selloff. Profit-taking after the stock's strong run has coincided with growing concerns about rising competition from Chinese memory manufacturers and expectations for softer NAND pricing. At the same time, the broader weakness across AI stocks — driven by concerns over long-term returns on massive AI infrastructure spending — has further weighed on sentiment.

However, the recent pullback has created an attractive opportunity for investors ahead of a key near-term catalyst. Sandisk is scheduled to report its fiscal fourth-quarter 2026 results on Aug. 5, and the earnings release could give SNDK stock a major boost.

Sandisk to Deliver Massive Earnings Growth

Sandisk is expected to deliver another quarter of robust earnings growth, with analysts projecting the momentum to continue into fiscal 2027 and beyond. With Sandisk delivering strong results while offering an upbeat outlook, the combination of improving fundamentals and a sharply discounted share price could set the stage for a meaningful rebound in SNDK stock.

Sandisk has been growing revenue and earnings at a solid pace, supported by higher pricing and volume. In Q3, surging NAND flash prices and strong AI-driven storage demand powered record revenue growth and significantly stronger profitability. This momentum should sustain in Q4 and in the quarters ahead.

Growth is likely to remain broad-based across business segments, with data-center revenue and the edge segment likely to sustain strong momentum. Management guided for revenue of $7.75 billion to $8.25 billion in Q4, implying strong sequential and annual growth. With AI infrastructure investments accelerating and NAND pricing expected to remain supportive, Sandisk is well-placed to sustain margin expansion and earnings growth over the coming quarters.

Sandisk forecast adjusted EPS of $30 to $33 for Q4, compared with just $0.29 a year earlier. Meanwhile, analysts expect Sandisk to report EPS of $33.28, higher than management’s own forecast. Higher volumes and an improved product mix should continue to strengthen operating leverage.

Importantly, Sandisk is implementing structural changes to support earnings. The company is focusing on new business models (NBMs), which are multiyear supply agreements, to add stability to its EPS growth. These long-term contracts provide greater revenue visibility, improve production planning, enhance factory utilization, and reduce the risk of excess capacity during periods of weaker demand.

The strategy is already gaining traction. During Q3, Sandisk secured three multiyear agreements representing approximately $42 billion in minimum revenue commitments, backed by financial guarantees, with some contracts extending up to five years and offering expansion opportunities as customer demand grows. This number is expected to grow in Q4 and beyond.

As AI-driven storage demand continues to increase, these contractual commitments could make Sandisk's earnings profile more predictable and resilient. Further, with favorable industry conditions, Sandisk appears well-positioned to deliver significant growth in its bottom line, which will likely lead to a sharp recovery rally in its share price.

Sandisk Stock Is Trading Cheaply

After a sharp pullback, SNDK stock is trading at a valuation that appears disconnected from its earnings potential. Trading at 5.9 times forward earnings, Sandisk stock looks deeply undervalued considering its strong growth outlook.

Wall Street expects EPS to jump 188% in fiscal 2027 despite a tough year-over-year (YOY) comparison. With the company consistently growing earnings at a solid pace, the current valuation leaves substantial room for further growth.

Conclusion

Despite the massive selloff in Sandisk stock, the company's long-term fundamentals remain solid. Strong earnings growth, expanding AI-driven storage demand, and the increasing adoption of long-term supply agreements provide greater earnings visibility and operational stability.

With the stock trading at a discounted valuation despite robust growth expectations, the upcoming earnings report could serve as a key catalyst. Overall, analysts are upbeat about SNDK stock and maintain a “Strong Buy” consensus rating.