SAN FRANCISCO, July 15, 2026, 09:06 PDT
- Sandisk dropped 12.4% to $1,540.51 in early trade, falling more than Micron and Western Digital.
- April’s filing listed $41.6 billion in remaining performance obligations. Of that, 99% hadn’t been billed yet and 15% is set to book as revenue over the next 12 months.
- CoreWeave has talked about using put options and other derivatives to guard against possible declines in memory and storage prices, but so far has not hedged.
Sandisk Corporation NASDAQ:SNDK shares fell 12.4% in early U.S. trading Wednesday as traders weighed a new challenge to the storage firm’s efforts to manage memory cycles. CoreWeave, Inc. NASDAQ:CRWV, which locked in a long-term supply deal with Sandisk, is looking at ways to hedge against a possible drop in chip prices, according to a source cited by Reuters. The person said discussions are at an early stage and there’s no trade yet.
Sandisk pitched long-term deals with price floors to investors as a way to get around NAND’s typical boom-to-bust swings, making this report key. As of its April 3 quarterly filing, Sandisk showed $41.6 billion in unrecognized contracted revenue, or remaining performance obligations, with $41.2 billion unbilled. Those numbers don’t include two extra contracts signed after the quarter closed.
The estimated contract balance is roughly 2.2 times Sandisk’s projected fiscal 2026 sales. That calculation includes $11.28 billion reported across the first three quarters, plus $8 billion from the midpoint of fourth-quarter guidance, for a total near $19.28 billion. Still, Sandisk is guiding to only 15% of the obligations, or about $6.24 billion, turning into revenue over the next year. Most of that headline number remains tied up in long-term contracts—not cash in hand.
| Contract measure, as of April 3 | Amount | Investor comparison |
|---|---|---|
| Remaining performance obligations | $41.60 billion | 2.2x estimated FY2026 revenue |
| Unbilled obligations | $41.20 billion | 99% of the total |
| Expected to recognize in 12 months | About $6.24 billion | 15% of the total |
| Total contract liabilities, mostly long-term contracts | $511 million | 1.2% of the total |
CoreWeave’s hedge plan would leave its purchase commitments in place. The put option gives the right to sell at a set price and could go up if shares of memory suppliers fall with chip prices. The takeaway for investors: Sandisk has pushed some of the cycle’s risk to its customers, and now at least one buyer is looking at pushing some of that risk into financial markets.
Sandisk dropped harder than Micron Technology, Inc. NASDAQ:MU and Western Digital Corporation NASDAQ:WDC. Around 8:51 a.m. PDT, Sandisk had fallen about 3.7 percentage points more than their average loss.
| Company | Share price | Intraday move | P/E |
|---|---|---|---|
| Sandisk NASDAQ:SNDK | $1,540.51 | fell 12.4% | 53.6 times |
| Micron NASDAQ:MU | $900.56 | dropped 8.4% | 20.4 times |
| Western Digital NASDAQ:WDC | $513.06 | lost 8.9% | 30.7 times |
Sandisk’s price/earnings ratio is over double what Micron and Western Digital trade at. The stock carries a big premium here, with the market betting new contracts will hold up earnings if flash prices soften. Investors are pricing in scarce supply and looking for signs this cycle plays out differently. Wednesday’s price changes don’t tell the full story.
Bulls are holding their ground. Evercore’s Amit Daryanani NYSE:EVR bumped his Sandisk target up to $3,100 from $1,400, saying investors still “underappreciating the durability” of earnings and free cash flow. Citigroup Inc. NYSE:C kept a $2,500 target. Both targets imply about 101% and 62% upside from Wednesday’s open. Barron’s
Investors are betting on a big earnings rebound. Sandisk reported fiscal Q3 revenue of $5.95 billion with gross margin at 78.4%, up from 22.5% a year ago, on higher prices and more data center sales. “The bane of this industry has been the boom-bust cycle,” CEO David Goeckeler told Reuters in April. “We want consistent, predictable economics.” SEC
But these contracts don’t make revenue as safe as a bond. Sandisk flagged in its filing that if a customer fails, the guarantees might not make up the lost sales. If Sandisk misses deliveries, the company could have to cut prices, lower volumes, pay damages, or see deals end early. Its top 10 customers brought in 46% of Q3 revenue, with one buyer making up more than 10%. Talking about hedging here isn’t a sign of default, but it does show what buyers might have to pay if price floors go the wrong way for them.
There’s a chance the CoreWeave hedge doesn’t happen at all, and the memory cycle could run tighter for longer than buyers thought. Top memory names don’t see new fabs hitting full run rates before early 2028. Sandisk has earnings on August 5 and its investor day follows on August 13. Investors want to hear how recent deals have moved the contract book, how the fixed vs. variable pricing breaks down, and if customer risk is getting more concentrated.
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