Analyst Blayne Curtis said strong June-quarter execution was offset by in-line September guidance, slower NAND growth expectations and a lower margin outlook, while data center is seen as the main future growth driver.
Jefferies lowered its price target on SanDisk (SNDK) to $1,750 from $3,000 while maintaining a buy rating, arguing that a strong June quarter was followed by September-quarter guidance that only met expectations and could weigh on near-term investor sentiment. Analyst Blayne Curtis said SanDisk expects year-on-year NAND (flash memory chip) revenue growth to slow in the September quarter from the June quarter, with gains in bit shipments (memory unit volumes) and average selling prices both moderating. Management also reduced its gross margin guidance, saying lower margins on long-term agreements offset the benefit of improving pricing. Edge business remained the biggest contributor to June-quarter growth, with revenue up nearly 400% year on year and accounting for 61% of total revenue, though Jefferies said that may include relatively aggressive inventory building that could turn into short-term pressure on bit shipments over the next few quarters. Consumer revenue fell 32% quarter on quarter to $556 million as higher prices hurt demand. Jefferies said data center will be SanDisk's main growth engine going forward. The company has expanded its new business model to eight customers across data center and edge, with customer commitments covering more than 50% of planned bit output for fiscal 2027 and about 67% for fiscal 2028.