Sandisk (SNDK) has been among the most volatile stocks on Wall Street in the past year. Valued at a market capitalization of $189.5 billion, the tech stock has returned more than 2,800% over the last 12 months. Despite these market-thumping returns, SNDK stock is down more than 45% from its all-time highs.
Sandisk is down sharply from its peak, even though the company just posted one of the best quarters in its history. Let’s take a closer look.
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Sandisk Is Part of the AI Segment
Sandisk makes NAND flash memory, the chips that store data in everything from laptops to massive data-center servers. For years, this was a boring, cyclical business where prices rose and fell with supply and demand.
On the company’s fiscal third-quarter earnings call, CEO David Goeckeler said that Sandisk signed five multiyear supply partnerships with customers that the company calls new business models (NBMs). These deals lock in demand for Sandisk and supply for its customers, backed by financial guarantees exceeding $11 billion. CFO Luis Visoso told analysts on the call that the three contracts signed in Q3 carry a minimum contractual revenue of about $42 billion, a figure the company now tracks as remaining performance obligations (RPO).
AI remains the key driver behind Sandisk’s explosive growth. Data-center revenue jumped 233% sequentially to $1.47 billion in Q3, fueled by demand for memory that supports AI inference, reasoning tasks, and agentic systems.
Goeckeler explained that AI workloads increasingly rely on techniques like KV cache, which require large amounts of fast flash storage well beyond what is needed to hold the AI model itself. Total revenue reached $5.95 billion in Q3, up 251% year-over-year (YOY), while non-GAAP gross margin expanded to 78.4%, up from 51.1% in Q2.
The Q3 report also showed that the board authorized a $6 billion share buyback program with no expiration date. That is a sign of confidence after Sandisk paid off its remaining term loan balance and built a net cash position of $3.74 billion.
Why Is SNDK Stock Falling?
In the last five trading days, SNDK stock has lost 13% as investors have worried about an AI bubble.
