Sandisk Projects Strong First-Quarter Revenue on AI Demand, Shares Fall in Late Trading

Sandisk issued a first-quarter revenue forecast that surpassed Wall Street expectations, attributing the optimistic outlook to surging demand for its memory chips used in artificial intelligence infrastructure. Despite the strong guidance and a fourth-quarter earnings beat, the company's shares fell more than 3% in extended trading on Wednesday.

Strong Guidance Follows Q4 Beat

The Milpitas, California-based company provided robust guidance for its upcoming first quarter, expecting to capitalize on the continued build-out of AI capabilities.

• Q1 Revenue Forecast: Projected to be between $10.30 billion and $10.80 billion. The midpoint of this range is above the analyst consensus of $10.47 billion, according to LSEG data.
• Q1 Adjusted Profit Forecast: Expected to be between $44 and $46 per share, exceeding the average estimate of $43.12.

This forecast follows a strong performance in the fourth quarter, where Sandisk also topped estimates. The company reported revenue of $8.97 billion against an expected $8.39 billion, and adjusted profit came in at $39.25 per share, well ahead of the $34.45 consensus.

AI Fuels Data Center Demand

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The rapid expansion of generative AI is a primary driver for Sandisk's business, boosting demand for its enterprise solid-state drives (SSDs) and flash memory chips. As data centers expand to handle more complex AI workloads, they require significantly more storage and computing capacity.

This trend was evident in the company's fourth-quarter results, where data-center revenue reached $2.98 billion, more than doubling from the third quarter. The strong performance marks a successful year for the company since its separation from Western Digital in early 2025.

Market Reaction and Capital Returns

Despite the positive results and outlook, the immediate market reaction was negative. The stock's decline in after-hours trading comes after a significant run-up, with shares having risen more than five-fold this year amid a broader rally in memory and storage stocks.

Sandisk also announced a move to boost shareholder returns, with its board approving an additional $14 billion for its share repurchase program. This brings the company's total remaining buyback authorization to $15.5 billion.