MILPITAS, California, July 7, 2026, 10:06 PDT
- Sandisk NASDAQ:SNDK dropped roughly 8.5% in morning Nasdaq trading. This came after Samsung Electronics KRX:005930 issued record Q2 guidance, then shares slid in Seoul.
- Investors are now watching cash durability. Sandisk’s latest filing listed $41.6 billion in remaining performance obligations, about seven times its Q3 revenue.
- Adjusted free cash flow for Q3 came in at $2.96 billion, almost half of revenue. Cash capex was 1.4% of revenue.
Sandisk NASDAQ:SNDK stock dropped about 8.5% to $1,596.75 in morning trading on Nasdaq. That pullback hit a rally that The Motley Fool had pegged at 635% for the year as of Tuesday, down from a peak of 884%. Now investors are looking at whether slower NAND price hikes can still keep margins up if demand stays contracted.
Storage stocks took a bigger hit from the selling than Nvidia NASDAQ:NVDA, which stayed positive on the same feed.
| Company | Ticker | Latest price | Move vs prior close | P/E | Market cap |
|---|---|---|---|---|---|
| Sandisk | NASDAQ:SNDK | $1,596.75 | down 8.5% | 55.5 | $250.7 bln |
| Micron Technology | NASDAQ:MU | $925.72 | fell 6.0% | 20.9 | $1.06 trln |
| Western Digital | NASDAQ:WDC | $527.42 | lost 8.7% | 31.5 | $181.6 bln |
| Seagate Technology | NASDAQ:STX | $819.53 | off 5.6% | 77.7 | $187.6 bln |
| Nvidia | NASDAQ:NVDA | $197.28 | up 0.9% | 30.0 | $4.81 trln |
Samsung Electronics KRX:005930 triggered a memory sector review after saying it expects Q2 sales of around 171 trillion won with operating profit near 89.4 trillion won. Reuters said Samsung shares tumbled 6.9% in Seoul. SK Hynix KRX:000660 dropped 6%, and the KOSPI shed 4.9%.
Albert Yong, managing partner at Petra Capital Management, said the market had been expecting Samsung’s earnings and most of the news was already in the price. Morningstar analyst Jing Jie Yu said the focus now is on how memory prices hold up, after DRAM price gains ran short of forecasts.
Sandisk’s numbers make it tough to pin the drop on just weak AI demand. Fiscal Q3 revenue came in at $5.95 billion, up 97% from the previous quarter. Datacenter pulled in $1.47 billion, up 233%. Edge revenue hit $3.66 billion, up 118%. Consumer was softer at $820 million, down 10%. For Q4, Sandisk guided revenue between $7.75 billion and $8.25 billion, with non-GAAP EPS seen at $30 to $33.
| Sandisk end market | Q3 revenue | Q/Q change | Y/Y change |
|---|---|---|---|
| Datacenter | $1.467 bln | up 233% | up 645% |
| Edge | $3.663 bln | rose 118% | up 295% |
| Consumer | $0.820 bln | fell 10% | up 44% |
Datacenter accounted for 24.7% of Q3 revenue, up from 14.5% in Q2, according to company segment figures. That shift is key for investors as the valuation argument now depends more on enterprise SSD and AI storage sales than on legacy consumer flash.
Sandisk’s 10-Q listed $41.6 billion in remaining performance obligations. The Q3 slide deck had $2.955 billion in adjusted free cash flow, $83 million in cash capex, and a $6 billion buyback authorization. The contract and cash math gives another view on the stock.
| Sandisk metric | Latest figure | Calculation | Investor read |
|---|---|---|---|
| Remaining performance obligations | $41.6 bln | 7.0x Q3 revenue | Contracts lock in more than just spot memory |
| Expected revenue inside 12 months | About 15% of RPO | About $6.2 bln | Equals roughly Q3 revenue |
| Adjusted free cash flow | $2.955 bln | 49.7% of Q3 revenue | Cash still backs up the story |
| Cash capex | $83 mln | 1.4% of Q3 revenue | Cash capex stays low |
| Buyback authorization | $6 bln | 2.4% of current market cap | Significant, but less so after shares moved up |
Sandisk trades at 55.5 times trailing EPS based on the latest market feed. Taking the midpoint of the company’s Q4 EPS outlook and annualizing that quarter shows a multiple of about 12.7. That’s just a run-rate check, not a full-year forecast. The gap suggests investors are pricing in cycle risk, not just the current earnings.
CEO David Goeckeler said Sandisk is shifting to multi-year deals with customers, with binding financial terms. Reuters said in May the company had signed five long-term supply agreements, three of which total $42 billion and run from one to five years.
Sandisk could see more gains from AI data center growth and long-term deals, according to a Seeking Alpha analysis out Monday. The report flagged risks around oversupply and market cycles. The Motley Fool took a similar bullish view Tuesday, pointing to tight memory supply. Another piece published Monday pointed to Sandisk’s roughly 14% slide on July 2 as fueling discussion on AI memory.
The 10-Q brings up an extra risk, pointing to customer concentration. The report shows the top 10 customers were behind 46% of Q3 revenue, while a single customer drove over 10%. It also says just around 15% of the $41.6 billion in remaining performance obligations should turn into revenue in the next 12 months.
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