Sandisk's Data Center Ramp is Gaining Ground: Is Growth Sustainable?

Sandisk (SNDK) is gaining meaningful traction in the data center market, with its ramp-up increasingly tied to the surge in AI-driven workloads. As enterprises and hyperscalers scale AI infrastructure, the need for fast, high-density storage infrastructure is intensifying, placing enterprise SSDs at the center of AI infrastructure buildouts. Sandisk's expanding presence in this segment, supported by next-generation PCIe Gen5 drives and the forthcoming BiCS8 QLC Stargate solution, is driving a clear shift in its revenue mix toward higher-value data center deployments, signaling a structural pivot beyond traditional end markets.

The importance of this ramp-up lies in the changing nature of NAND demand. Data center consumption is increasingly driven by long-duration AI investments rather than short-cycle consumer trends, improving visibility and durability. Sandisk's PCIe Gen5 enterprise SSDs deliver higher throughput and faster data access essential for AI workloads, while the upcoming BiCS8 QLC Stargate solution is designed for higher storage density at better cost efficiency, making it well-suited for large-scale inference environments. This combination allows Sandisk to address both performance-intensive and capacity-driven use cases while deepening engagement with hyperscalers and enterprise customers.

The impact is visible with fiscal second-quarter revenues reaching $3.03 billion, reflecting 61.25% year-over-year growth, supported by strong demand across end markets and particularly robust traction in data center. This shift is also supporting margin expansion through improved pricing and a richer product mix. The Zacks Consensus Estimate for Sandisk’s fiscal third quarter revenues is pegged at $4 billion, indicating year-over-year growth of 136.14%. With data center becoming a structurally larger demand driver, the current ramp appears increasingly sustainable.

SNDK Faces Stiff Competition

SNDK faces stiff competition as peers also target the AI-driven data center storage opportunity.

Western Digital WDC remains a direct rival in NAND flash and enterprise SSDs, competing across similar PCIe-based markets with established hyperscaler relationships. Western Digital's broader HDD exposure, however, may dilute focused NAND execution. Western Digital maintains deep cloud customer ties that remain competitively relevant.

Micron Technology MU presents another challenge, with a growing enterprise SSD portfolio and a diversified memory franchise, including HBM. Micron Technology benefits from additional AI infrastructure leverage, though its NAND segment is one part of a larger memory business, unlike SNDK's pure-play focus.

SNDK’s Share Price Performance, Valuation & Estimates

Sandisk’s shares have appreciated 183.8% in the trailing three-month period, outperforming the broader Zacks Computer and Technology sector’s decline of 7.5%.

SNDK Stock Outperforms Sector

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SNDK stock is trading at a forward 12-month price/sales of 4.7X compared with the Zacks Computer-Storage Devices’ 2.4X. Sandisk has a Value Score of F.

SNDK’s Valuation

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The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $31.37 per share, up 15.3% over the past 30 days. Sandisk reported earnings of $2.99 per share in fiscal 2025.

Sandisk Corporation Price and Consensus

Sandisk Corporation price-consensus-chart | Sandisk Corporation Quote

Sandisk currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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