Business executives saw SSD revenues rise steeply, up 378 percent year-on-year to a record $11 billion, surpassing the prior quarter’s $9 billion record, which itself had beaten the $6 billion mark from the quarter before. This streak of record results is set to continue, with forecasts pointing to over $12 billion in revenue next quarter.
GAAP net income hit $8.1 billion, surging an extraordinary 7,133 percent. Cash flow figures are equally striking: operating cash flow stood at $6.4 billion, compared with $488 million a year earlier, while free cash flow reached $5.7 billion versus $448 million in the prior-year period. Even high-tech firms across the UK and EU would view such results as almost unattainable. Sandisk’s performance is no fleeting boom. All NAND, DRAM and HBM suppliers are seeing sustained robust growth, backed by long-term supply and purchase agreements with customers running to 2028 and beyond, underpinning confidence in lasting demand.
David Goeckeler, CEO and Chairman, commented: “We have started fiscal year 2027 with another quarter of strong performance. Strong, growing demand for our products has driven outperformance in our data center business. We are executing the strategy laid out at Investor Day, delivering growing, durable free cash flow through technology leadership, deep customer partnerships and disciplined financial management.”
Looking back to when a corporate raider pushed for Western Digital to separate its hard disk and flash operations into WD and Sandisk to boost shareholder value, it is clear that Elliott’s strategy has succeeded spectacularly thanks to the then-unforeseen AI boom. WD recently released its quarterly earnings, with Sandisk growing at a far faster pace. AI workloads favour SSDs over HDDs.
Can this momentum hold? Sandisk states its outlook is supported by a structural, AI-fuelled rise in NAND demand and positive customer signals under its New Business Model (NBM) stretching past fiscal 2030. NBMs are long-term supply and purchase contracts with major clients. “Customer signals extend beyond fiscal year 2030 through our NBM partnerships; recent engagements with leading AI companies point to further upside in demand,” the firm noted. It also shared that its NBM pipeline exceeds its available supply through the end of the decade.
AI inferencing will sustain demand. Sandisk expects KV cache to account for roughly one-third of flash consumption in AI datacenters by the end of the decade, with the AI datacenter market opportunity approaching the scale of today’s entire NAND industry. In its view, TLC flash suits latency-sensitive KV cache and active datasets, while QLC delivers higher density for data lakes, vector databases powering AI search and retrieval repositories.
Sandisk reports results across three segments: datacenter, edge and consumer.
Sandisk describes edge as a large, strategically critical market covering smartphones, PCs, automotive, tablets and a widening range of physical AI deployments. Deepening ties with key customers support its view that automotive can eventually become one of its largest edge markets.
The consumer segment is framed as a differentiated strategic asset that forms a stable business foundation. Direct market exposure guides product development and gives early visibility into shifts in end-user demand. Some may see this as justification for staying in a shrinking market, given consumer accounts for just 3.7 percent of Sandisk’s total revenue. Gone are the days when USB drives were freely distributed at industry events. Prices have climbed so sharply that the market may never return to that era.
Against its NAND fab joint venture partner Kioxia, which holds a solid datacenter footprint, Sandisk’s revenue growth is constrained by its historically large but slower-growing edge business and shrinking consumer segment. Goeckeler is rebalancing the portfolio to expand the datacenter segment, now its fastest-growing division. It may overtake edge revenue within one or two quarters, as elevated memory prices weigh on PC sales.
Share price gains prompted Sandisk to announce an eight-for-one forward stock split effective November 19, 2026, to improve share accessibility, including for staff via the employee stock purchase plan. Kioxia is also undertaking a stock split for the same reason.
Sandisk is partnering with SK Hynix to expand the AI NAND market using HBF. This technology stacks 3D NAND dies with TSV interconnects on a base logic chip, similar to HBM, and provides high-bandwidth links to GPUs to overcome the bandwidth and latency limits of conventional NVMe SSDs. No GPU vendor has yet committed to HBF. Sandisk hit a key milestone this quarter with the tape-out of its first HBF memory die; samples of initial HBF-based products remain on track for release next calendar year.
Sandisk forecasts a strong market in 2027, with datacenter once again the primary growth engine and making up over 55 percent of demand. Datacenter NAND bit consumption is projected to rise around 40 percent year-on-year in 2027, driven by AI capital spending, after more than doubling in 2026.
Beijing Qianxing Jietong Technology Co., Ltd.
Sandy Yang/Global Strategy Director
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Email: yangyd@qianxingdata.com
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