Sandisk posts $8.97B Q4 on AI storage surge, stock still slips

A memory company printing an 84.6% adjusted gross margin is the kind of number you double-check. Sandisk did exactly that in its fiscal Q4, reported through Stocktitan: revenue of $8.97 billion, up 51% sequentially and 372% year over year, with GAAP diluted EPS of $43.97 and non-GAAP EPS of $39.25. Datacenter revenue alone was $2.98 billion, more than doubling from the prior quarter. The company also authorized an additional $14 billion in buybacks, taking total remaining authorization to $15.5 billion.

The important sentence in the release is the one about the mix of that sequential growth: roughly one-third came from higher volumes and two-thirds from pricing. That is the AI-era NAND squeeze showing up in a single line. Hyperscalers are buying high-capacity SSDs faster than the industry can add bit supply, and the spot price for that scarcity is running through Sandisk's income statement. It is why the margin looks the way it does, and it is also why the margin is the thing to watch, not the growth rate.

And yet the stock did not celebrate. Benzinga and other outlets flagged that shares slid despite the beat, because the Q1 FY27 guide of $10.30 to $10.80 billion in revenue came in under the roughly $11.1 billion analysts were modeling. When a company grows 372% and the market's response is to sell the guide, the bar has clearly moved. Investors are now trying to price how long the AI storage cycle runs, not whether it is here.

The honest caveat is that the release does not break out how much of that datacenter revenue is concentrated in a small number of hyperscale customers, does not detail contract lengths, and does not spell out Sandisk's own capex response, which is exactly the information that would tell you whether these margins are a one-quarter print or a plateau. Consumer revenue also fell 32% sequentially to $556 million, so the growth engine is very much single-lane.

The forward-looking read: as long as bit supply lags AI-driven demand, Sandisk, along with the broader NAND and HBM cohort, keeps banking pricing power, and the $14 billion buyback is management signaling they intend to return the windfall rather than immediately spend it back into the ground. The moment the supply-demand curve loosens, the same operating leverage runs the other way, and that is the swing every hyperscaler and competing supplier is now modeling.