SNDK · Sandisk
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $1,404.77
Note written ·
Price against the kill line
37.0% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $1,404.77, on record since 11 November 2026. The shares are down 50.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $1,404.77, the highest close of the 20 sessions to 28 October 2026 (a pre-split price that converts at one-eighth after 19 November 2026), would show the shares leading the S&P 500 and prove this call wrong. TrendForce reporting higher November NAND contract prices would also prove it wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 2 October 2026, filed 30 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 11,031
- Revenue, change on a year (%)
- +377.9
- Gross margin (%)
- 85.0
- Operating margin (%)
- 79.6
- Free cash flow, four quarters ($M)
- 17,365
- Price to earnings (×)
- 6.5
- Free-cash-flow yield (%)
- 13.8
All filed numbers
What Sandisk reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 11,031 | +377.9 | 85.0 | 79.6 |
| first filed | 8,965 | +371.6 | 84.6 | 78.5 |
| first filed | 5,950 | +251.0 | 78.4 | 69.1 |
| first filed | 3,025 | +61.2 | 50.9 | 35.2 |
| first filed | 2,308 | +22.6 | 29.8 | 7.6 |
| first filed | 1,901 | +8.0 | 26.2 | 0.9 |
| Pre-tax income ($M) | 9,319 |
| Net income ($M) four quarters: 19,422 | 8,101 |
| Diluted shares, change on a year (%) against the quarter to 3 October 2025 | +3.4 |
| Operating cash flow ($M) | 17,546 |
| Capital spending ($M) | 181 |
| Free cash flow ($M) | 17,365 |
| Cash and short-term investments ($M) | 5,136 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) | 1,500 |
| Backlog, orders not yet delivered ($M) | 88,900 |
| Receivables ($M) | 6,585 |
| Inventory ($M) | 3,016 |
| Shareholders' equity ($M) | 18,134 |
| Market value ($M) | 125,928 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 6.5 |
| Price to book value (×) | 6.9 |
| Free-cash-flow yield (%) | 13.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.3% of shares outstanding sold short, 1.0 days of average trading to cover, −2.4% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $121.2M |
| 12 monthsfrom | $0 | $134.5M |
The thesis
Sandisk's shares look more likely to lag the S&P 500 than lead it over the next three months. Investors are pricing a peak in NAND flash prices, and the company's strong guidance has not stopped them. Three data points will show whether pricing holds: TrendForce's November contract prices, Micron's December report and Sandisk's fiscal Q2 2027 results in late January.
TrendForce's October report, last updated 30 October 2026, said NAND wafer contract prices "ended their upward run." Prices held flat across MLC, TLC and QLC flash at what TrendForce called a high-level plateau. That is still the latest contract-price reading.
The shares closed at $977.69 on 11 November 2026, up from $859.99 the session before. Benzinga reported that on 11 November 2026 CoreWeave's third-quarter beat set off a rally in AI chip and memory stocks, with the Nasdaq 100 up 2.8%. Micron and Sandisk rose after CoreWeave's chief executive said AI demand is outpacing the world's capacity to add supply. The rating is Low because the rally came on comments from a customer, not on new flash-price data. Analyst targets have been coming down since 7 November 2026, and the shares' three-month change is still −36.0%. All per-share figures in this note are pre-split; the eight-for-one split takes effect 19 November 2026.
Bullish and bearish views on Sandisk Corporation
The bull case on Sandisk Corporation (SNDK), in brief: guidance points to another revenue step-up. The bear case: contract prices have reached a plateau.
Bull case
- Guidance points to another revenue step-up. Sandisk guided on 29 October 2026 to fiscal Q2 revenue of $12.2–$12.6 billion and adjusted earnings per share (EPS) of $55–$57. That compares with fiscal Q1 revenue of $11.031 billion and adjusted EPS of $49.51. Non-GAAP gross margin, which excludes certain items, is guided to 84.5%–85.5%.
- Contracts cover much future output. Management said on 29 October 2026 that remaining performance obligations were $88.9 billion, within $93.9 billion of minimum contracted revenue. About half of fiscal 2027 bits and two-thirds of fiscal 2028 bits are committed.
- Data center revenue drives the growth. Benzinga reported on 30 October 2026 that data center revenue reached $4.8 billion in fiscal Q1, up 61% from the prior quarter. Data center accounted for 88.3% of the quarter's revenue increase.
- AI customers report demand ahead of capacity. Benzinga reported on 11 November 2026 that CoreWeave's chief executive said AI demand is outpacing the world's capacity, and memory stocks jumped on the comment.
- Some analysts call the selloff overdone. Fiscal.ai reported on 11 November 2026 that Evercore ISI's Amit Daryanani issued a positive outlook with a $2,500 target, citing structural change in the memory industry. Benzinga reported on 9 November 2026 that Cantor Fitzgerald and HSBC both named Sandisk among their chip-stock picks after a 38% sector decline.
- Valuation sits near one-year lows. TIKR put the shares at 4.4 times forward earnings at the 2 November 2026 close, against an average of 11 times over the past year.
- Buyback reduces the share count. Benzinga reported on 29 October 2026 that Sandisk repurchased $5.0 billion of stock in fiscal Q1, about 3.2 million shares.
Bear case
- Contract prices have reached a plateau. TrendForce reported flat October NAND wafer contract prices in its report last updated 30 October 2026. It warned that slow digestion of consumer inventory could raise inventory pressure on suppliers and the risk of contract-price corrections.
- Spot prices are already falling. TrendForce reported on 28 October 2026 that 512Gb TLC wafer spot prices fell 9.19% in one week. Chinese smartphone brands had cut prices in Double 11 promotions to revive weak demand.
- Kioxia guided December-quarter profit flat. TIKR and BigGo Finance reported that on 30 October 2026 Kioxia, Sandisk's manufacturing partner, guided December-quarter operating profit to about ¥2.00 trillion, against ¥2.35 trillion expected. That is level with about ¥1.995 trillion in the September quarter.
- Price increases now drive less of the growth. TIKR reported on 3 November 2026 that price increases drove about two-thirds of the prior quarter's 51% growth but only about 40% of fiscal Q1's 23%. Management said on 29 October 2026 that fiscal Q2 guidance assumes only modest price increases.
- Analyst targets are moving down. KuCoin News reported on 7 November 2026 that Wells Fargo cut its target to $1,300 from $1,550 and RBC Capital Markets to $1,400 from $1,600. Fox Advisors had cut the shares to Equal-Weight from Overweight by 2 November 2026.
- Insiders keep selling under preset plans. SEC Form 4 filings show the chief legal officer sold 600 shares at $1,158.26 on 2 November 2026 under a Rule 10b5-1 trading plan. The chief executive sold 33,841 shares at an average of $1,574.21 on 17 September 2026 under the same type of plan.
Price setup
The shares closed at $977.69 on 11 November 2026. That is 58.5% below the 52-week intraday high of $2,354.39 set on 22 June 2026. The three-month change is −36.0%, measured from the $1,528.11 close of 13 August 2026. The lowest close of the November selloff was $806.43 on 5 November 2026. Benzinga reported on 7 November 2026 that the shares had reached their lowest level since 9 April.
As of 11 November 2026, the shares sit below both the 50-day average of $1,467.15 and the 200-day average of $1,278.66, computed from adjusted daily closes. The 50-day average is still above the 200-day. The nearest reference above the price is the $1,037.40 close of 4 November 2026, the last close before the 5 November 2026 fall. The 11 November 2026 close sits about 6% below it. A move back above that close and then the 200-day average would show the selloff being reversed.
Leveraged products amplify the swings. Benzinga reported that on 5 November 2026 the 2X inverse SNDQ exchange-traded fund (ETF) rose about 35%, while four leveraged long Sandisk funds fell about 34%. Benzinga reported on 11 November 2026 that the 3X semiconductor fund SOXL rose 19% that day.
Catalysts ahead
- 17 November 2026: Nvidia fiscal Q3 2027 results, after the close. Shows whether the AI-demand recovery that lifted memory stocks on 11 November 2026 holds up in the outlook of the largest AI chip seller.
- 19 November 2026: Sandisk eight-for-one stock split takes effect; split-adjusted trading starts 20 November 2026. Every earlier per-share figure, including analyst targets and the kill line, converts at one-eighth.
- ~30 November 2026 (est.): TrendForce November NAND contract prices. A second flat or lower month after October's plateau would confirm that flash price increases have ended. A higher reading would undercut the case for a peak.
- ~17 December 2026 (est.): Micron fiscal Q1 2027 results. The first major NAND producer report since Sandisk's shows whether flash pricing is holding or rolling over.
- ~28 January 2027 (est.): Sandisk fiscal Q2 2027 results. Results show whether revenue reaches the $12.2–$12.6 billion guidance and whether non-GAAP gross margin stays at 84.5% or higher as price increases slow.
What would change the view
A daily close above $1,404.77, the highest close of the 20 sessions to 28 October 2026 (a pre-split price that converts at one-eighth after 19 November 2026), would show the shares leading the S&P 500 and prove this call wrong. TrendForce reporting higher November NAND contract prices would also prove it wrong.
What it trades with
Sandisk trades with Micron, Western Digital, Kioxia, Samsung and SK hynix. Its largest moves since 30 October 2026 have come on news about those peers and the wider sector: Kioxia's guidance, the 5 November 2026 AI selloff and CoreWeave's 11 November 2026 results. On 12 November 2026, Benzinga noted that Sandisk and Western Digital were both down about 60% from their peaks. KuCoin News reported on 7 November 2026 that the Roundhill Memory ETF was more than 51% below its record high, so money moving in and out of memory funds hits the shares directly. Nvidia's report on 17 November 2026 sets the tone for AI hardware. On 6 November 2026, Benzinga relayed a report by The Information that TSMC is weighing production of advanced memory chips, which would add a potential new memory supplier.
The evidence, claim by claim (8)
- NAND flash wafer contract prices ended their upward run in October 2026, holding flat across MLC, TLC and QLC at a high-level plateau. TrendForce, NAND Flash Wafer Contract Price Oct. 2026 · as of
- 512Gb TLC wafer spot prices fell 9.19% in one week as Chinese smartphone brands cut prices during Double 11 promotions. TrendForce memory spot price update · as of
- Fiscal Q1 2027 revenue was $11.031 billion, adjusted EPS $49.51 and non-GAAP gross margin 85.1%. Sandisk fiscal Q1 2027 release; Benzinga · as of
- Fiscal Q2 2027 guidance: revenue $12.2–$12.6 billion, adjusted EPS $55–$57, non-GAAP gross margin 84.5%–85.5%. Sandisk fiscal Q1 2027 release · as of
- Remaining performance obligations were $88.9 billion within $93.9 billion of minimum contracted revenue; about half of FY2027 bits and two-thirds of FY2028 bits are committed. Sandisk Q1 FY2027 earnings call · as of
- Kioxia guided December-quarter operating profit to about ¥2.00 trillion against ¥2.35 trillion expected, flat with about ¥1.995 trillion in the September quarter. Kioxia results via BigGo Finance and TIKR · as of
- Wells Fargo cut its Sandisk target to $1,300 from $1,550 and RBC to $1,400 from $1,600; the average analyst target was $2,056, pre-split. KuCoin News · as of
- Evercore ISI's Amit Daryanani issued a positive outlook on Sandisk with a $2,500 target, citing structural change in the memory industry. Fiscal.ai report on Evercore ISI note · as of
Sources
- NAND Flash Wafer Contract Price Oct. 2026 · trendforce.com ·
- trendforce.com ·
- SanDisk Stock Drops 65% Amid Memory Industry Sell-Off, Announces 8-for-1 Stock Split · kucoin.com ·
- SanDisk Stock Drops Ahead of Split as Wall Street Analysts Weigh In · benzinga.com
- Sandisk Lost 14% in a Week on Kioxia's Warning. Wedbush Still Sees $2,000 · tikr.com ·
- Kioxia's Guidance Misses Estimates, Shares Plunge 17% Intraday as Market Fears Cooling AI Storage Demand · finance.biggo.com
- SanDisk Leads Memory Stocks Lower: A Look Inside the Rout · benzinga.com
- NVIDIA
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