Sandisk Q3 Results Are In, and Blockbuster 97% Gains Will Push This Stock into the Stratosphere
AI storage leader Sandisk is riding high on a very positive Q3 earnings report that showed tremendous revenue growth.
Quick overview
- Sandisk reported a 97% increase in Q3 revenue, reaching $5.95 billion, and exceeded Wall Street expectations with a GAAP net income of $3.61 billion.
- Despite initial declines in stock price, Sandisk's shares rebounded by 1.8% following the earnings report, indicating strong market confidence.
- The company anticipates Q4 revenue between $7.75 billion and $8.25 billion, with an expected net income per share of around $31.
- Sandisk's growth is driven by high demand for their NAND storage products, particularly in the AI sector, leading to increased prices and a super cycle in the market.
After the closing bell on Wednesday, Sandisk (SNDK) reported their Q3 earnings with an increase of 97% in revenue and a very positive outlook for the fourth quarter.
Sandisk beat Wall Street expectations for their Q3 earnings with a GAAP net income of 3.61 billion and overall revenue for the quarter at $5.95 billion. Their earnings per share (EPS) came in at $23.41 compared to the expected $14.66, and yet their stock fell on Thursday.
SNDK stock was down in premarket trading for Thursday but quickly righted itself and jumped 1.8% compared to where it was 24 hours earlier. We anticipate that this stock will continue to climb despite a subdued stock market environment and a climbing VIX fear gauge.
A Bullish Quarter for Sandisk
Early reports showed that Sandisk stock was in decline, and that played to the fears that AI-related stocks perform poorly at quarterly earnings time. The quick turnaround of the stock tells a different story, and Sandisk is already outperforming the market average.
For Thursday, the Nasdaq Composite with its technology focus is up 0.94% for the day at the time of writing, and the somewhat tech focused S&P 500 is up 0.75%. Later in the day, Sandisk may pull even further ahead of the market average as its tremendous quarterly performance is scrutinized more closely.
After climbing 332% for the year so far, Sandisk is at risk of peaking soon. The company has climbed so quickly and so high in both revenue and stock value that they may run out of space to grow in the near future. However, the company is getting much of its growth from the AI market, and companies need powerful storage that Sandisk supplies with their high performance NAND storage devices.
Because of the extremely high demand for their storage products and the recent industry shortages, Sandisk has been able to increase their prices. The high demand has created a super cycle that caused the market to explode in recent months. Despite Sandisk’s huge market share, there is enough room for competitors to perform well too and still allow Sandisk to make extraordinary revenue gains at the same time.
The company moved to higher value customers over the last quarter, focusing on those with exceptional needs that Sandisk was positioned to meet. Their Datacenter arm grew by 233%, offering solid state drives (SSDs) to mostly customers working in the AI field, all of whom would have need for high storage capacity components.
For the coming quarter, Sandisk expects revenue between $7.75 billion and $8.25 billion. Their anticipated net income per share to be around $31, and we expect their stock price to surge higher than ever in the coming days.
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