Sandisk forecasts upbeat quarterly revenue on AI-driven demand

SANDISK forecast quarterly revenue above estimates on Wednesday (Aug 5), banking on rising demand for its memory chips used in AI data centres.

Shares of the Milpitas, California-based company fell nearly 8 per cent in extended trading, after the midpoint of its current quarter profit forecast beat LSEG estimates but fell below estimates from other data providers. The decline also follows a nearly 470 per cent rise in its share price this year.

In an interview with Reuters, CEO David Goeckeler said the company has shifted its sales toward long-term, rather than quarterly, purchase agreements.

Sandisk said the median duration of those agreements is now four years.

The company has eight agreements in place with six customers worth at least US$93.9 billion. In its fiscal year ending in July 2027, half of its production will be sold under those deals, and in fiscal 2028, two-thirds of Sandisk’s output will be sold under such agreements.

“That’s light years ahead of where we were just three quarters ago,” Goeckeler said.

The company forecast first-quarter revenue between US$10.30 billion and US$10.80 billion, the midpoint of which is above analysts’ average estimate of US$10.47 billion, according to data compiled by LSEG.

Quarterly adjusted profit is expected to be between US$44 and US$46 per share, above estimates of US$43.12.

Generative AI’s rapid growth has been boosting demand for Sandisk’s enterprise solid-state drives and flash memory chips, as data centres require more storage and computing capacity.

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The company’s fourth-quarter data-centre revenue more than doubled from the third quarter to US$2.98 billion, capping a strong year for the company since separating from Western Digital in early 2025.

Sandisk reported fourth-quarter revenue of US$8.97 billion, beating estimates of US$8.39 billion. Adjusted profit came in at US$39.25 per share, exceeding estimates of US$34.45.

The company said it had signed five additional agreements under its new business model since April, including three with new customers and two expansions of existing deals.

Sandisk’s board approved an additional US$14 billion share repurchase programme, bringing its total remaining buyback authorisation to US$15.5 billion. REUTERS