SanDisk Shatters Earnings Records As AI Drives Surge

SanDisk, the data storage company once best known for its humble thumb drives, has just rewritten the playbook for tech earnings—and the market can’t stop buzzing. On January 29, 2026, SanDisk reported its fiscal second-quarter results, and the numbers were nothing short of historic. Shares of the company, already the best performer in the S&P 500 in 2025, exploded another 15% in after-hours trading, as investors and analysts scrambled to process just how far and fast the company has come since its spinoff from Western Digital less than a year ago.

Let’s get right to the headline numbers: SanDisk delivered adjusted earnings per share (EPS) of $6.20, demolishing Wall Street’s consensus expectation of $3.54 by a stunning 75%. Revenue for the quarter came in at $3.03 billion, a 61% jump year-over-year and well ahead of the $2.69 billion forecast. These aren’t just incremental beats—they’re the kind of results that make even seasoned market watchers do a double take. As CNBC put it, they “couldn’t believe how good” the earnings were and reportedly needed to triple-check the figures.

But the fireworks didn’t stop there. SanDisk also issued guidance for the third quarter that left analysts’ jaws on the floor. The company expects Q3 adjusted EPS of $12 to $14, far outpacing the $5.11 Wall Street had penciled in, and revenue between $4.4 billion and $4.8 billion, compared to the consensus estimate of $2.93 billion. As 24/7 Wall St. noted, this guidance “validates sustained pricing power” and suggests that the so-called NAND memory supercycle—fueled by insatiable demand from artificial intelligence (AI) infrastructure—has plenty of momentum left.

SanDisk’s CEO, David Goeckeler, was quick to highlight the company’s strategic agility and the fundamental shifts underway in the memory industry. “Let me frame the NAND industry’s evolution before discussing our end markets,” Goeckeler said on the earnings call. “NAND is now recognized as indispensable to the world’s storage needs, driving a foundational shift in how commercial relationships between suppliers and customers are structured. Supply certainty, longer planning horizons and multiyear commitments are increasingly essential to support structural demand that extends beyond the traditional cyclical model of our market.”

What does that mean in plain English? For years, the memory business was notorious for wild boom-bust cycles, with prices and profits swinging on the whims of supply gluts and shortfalls. But SanDisk now claims that the old rules are breaking down. Instead of haggling over prices every quarter, customers are locking in multiyear deals—reflecting the critical, ongoing need for storage in the AI age. Goeckeler summed it up: “These dynamics reveal the true value of our NAND technology and reinforce the need for continued innovation and disciplined execution. Our products are enabled by decades of sustained investment in R&D and innovation across NAND and system solutions, supported by substantial capital investments in world-class front-end and back-end manufacturing.”

The numbers back up the rhetoric. SanDisk’s gross margin soared to 51.1%, up 18.6 basis points year-over-year, while operating income surged 386%. Free cash flow exploded to $980 million, up a staggering 1,000% from a year ago. The company’s effective tax rate dropped to 14.3%, compared to 39.9% a year earlier—another sign of operational efficiency. And with $1.54 billion in cash and equivalents on hand, SanDisk is sitting pretty as it plans its next moves.

Breaking down the Q2 performance by segment, the datacenter business was a particular standout, with revenue of $440 million—up 76% year-over-year and 64% from the previous quarter, according to Benzinga. Edge revenue climbed to $1.68 billion, up 63%, while consumer revenue grew 52% to $907 million. The company credited “strong adoption among AI infrastructure builders, semi-custom customers and technology companies deploying AI at scale” for the surge in datacenter sales.

In the words of Goeckeler: “This quarter’s performance underscores our agility in capitalizing on better product mix, accelerating enterprise SSD deployments, and strengthening market demand dynamics, all at a time when the critical role that our products play in powering AI and the world’s technology is being recognized.”

It’s not just the income statement that’s turning heads. SanDisk’s stock performance has been nothing short of spectacular. After being spun off from Western Digital in February 2025, the company’s shares shot up nearly 560% over the course of the year, making it the S&P 500’s top performer. The rally has only accelerated in 2026, with the stock more than doubling in January alone. As of the close on January 29, shares were trading for $615, up 10% after hours, and even hitting $622.21 at one point in extended trading, as reported by Benzinga.

What’s driving this relentless momentum? The answer, in a word, is AI. The explosion of artificial intelligence applications has triggered a scramble to build out data centers, and the resulting demand for NAND memory far outstrips supply. Analysts now expect the NAND shortage to persist through 2027, with some projecting that SanDisk’s EPS could reach $10 to $12 in the March quarter—well above current estimates. The company’s own guidance for Q3 revenue and earnings is already blowing past even the most bullish expectations.

Of course, all this euphoria comes with a note of caution. SanDisk’s valuation multiple sits at around 41 times forward earnings, according to 24/7 Wall St.—hardly cheap by historical standards. Options activity is running hot, with call open interest 128% above the 30-day average, and short interest remains elevated. Some market observers warn that any hint of a slowdown or cautious tone from management could trigger sharp selling, especially after a 985% surge in the stock over the past year. The market, in other words, is pricing in near-perfection.

Still, SanDisk’s management has built a reputation for under-promising and over-delivering. The company has now beaten earnings estimates for four consecutive quarters, each time by a wider margin. In Q4 2025, SanDisk reported $0.29 per share against a consensus of $0.03—an 867% beat. Q1 FY2026 saw actual EPS of $1.22 versus estimates of $0.89, a 37% beat. This latest $6.20 EPS print against a $3.54 estimate continues a pattern that’s hard to ignore.

For now, SanDisk stands as a poster child for the AI-driven memory supercycle, with a business model that seems to have cracked the code for sustained growth in a notoriously volatile industry. Whether the rally can continue at this breakneck pace remains to be seen, but one thing is clear: SanDisk has the world’s attention, and it’s not letting go anytime soon.