SanDisk reported fourth-quarter revenue of $8.97 billion, exceeding analyst expectations of $8.39 billion, driven by rising demand for memory chips used in AI data centers. The company's adjusted earnings were $39.25 per share, surpassing estimates of $34.45 per share.
Key Details
CEO David Goeckeler noted a significant shift in customer interactions, stating that discussions have evolved from routine supply chain negotiations to strategic conversations involving top executives at major companies. SanDisk now has over four years of visibility into customer commitments, a substantial increase from just a few months previously. The company has secured eight agreements with six customers valued at over $93.9 billion, with plans for half of its production to be sold under these long-term contracts by fiscal year 2028.
For the first quarter of fiscal 2027, SanDisk forecasts revenue between $10.3 billion and $10.8 billion, with adjusted earnings expected to range from $44.00 to $46.00 per share. These projections align closely with analyst estimates, although some data providers had higher expectations. Following the earnings report, SanDisk shares fell 5.40% to $1,350.50 and dropped further by 7.96% in after-hours trading.
Background
The demand for SanDisk's enterprise solid-state drives and flash memory chips has surged due to the rapid growth of generative AI, which requires increased storage and computing capacity. The company reported that its data center revenue more than doubled from the previous quarter to $2.98 billion.
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The decline in SanDisk's share price could impact investor sentiment in the semiconductor sector, particularly among companies focused on AI and data center technologies. The forecasted revenue growth suggests continued strong demand for memory products, which may benefit related stocks in the technology sector.
Investors will watch for the upcoming quarterly earnings reports from major tech companies that could provide further insights into AI-driven demand and market trends.
Based on reporting by: benzinga.com, businesstimes.com.sg