SanDisk’s $94 Billion Backlog Can’t Bridge the Gap Between Record Results and a Disappointed Market

The arithmetic at SanDisk has rarely looked better. Fourth-quarter revenue hit $8.97 billion, full-year sales nearly tripled, and the company has locked in more than $94 billion in minimum revenue commitments stretching years into the future. Yet the stock keeps sliding, caught in a strange disconnect between what the books show and what the market wants to see.

Shares closed Thursday at €1,100, down 5.98 percent, and extended those losses on Friday, trading at €1,060 for a further 3.64 percent decline. Over the past month, the equity has shed roughly 28 to 30 percent of its value, leaving it about 46.6 percent below the June peak of €2,060. The selloff has a clear focal point: the company’s own guidance for the coming quarter.

A Blowout Quarter Overshadowed by a Single Number

The fourth-quarter results were, by any historical measure, exceptional. Revenue of $8.97 billion represented a 51 percent sequential jump, with adjusted earnings per share of $39.25. On a GAAP basis, net income came to $6.90 billion, or $43.97 per share. For the full fiscal year 2026, SanDisk posted revenue of $20.25 billion — a 175 percent increase year over year — and net income of $11.43 billion. Roughly two-thirds of the sequential growth came from higher pricing, with the remainder driven by increased volumes.

The data-center segment continues to be the engine room. Quarterly revenue there surged 103 percent to $2.98 billion, and its share of the overall portfolio expanded from 12 percent to 38 percent year over year, fueled by demand for AI inference workloads and the ramp of the QLC Stargate platform. The consumer business, by contrast, contracted 32 percent sequentially to $556 million — a reminder of how far the company has traveled from its USB-stick and memory-card origins.

None of that was the problem. The problem was the outlook. SanDisk guided first-quarter fiscal 2027 revenue to a range of $10.30 billion to $10.80 billion, with the midpoint coming in below the $10.8 billion consensus — and some analysts had been modeling as much as $11.1 billion. In premarket trading, the stock dropped roughly 9.2 percent, dragging sector peers along with it. Western Digital fell about 14.6 percent, while Micron and Seagate also came under pressure.

Contract Backlog and Buybacks as a Counterweight

Management’s response to the skepticism has been to point at the numbers that extend beyond the next quarter. SanDisk now holds ten “new business model” agreements — five of them signed since the company’s April call — covering a minimum revenue volume of $94 billion, with open performance obligations of $91 billion backed by $16.5 billion in financial guarantees. More than half of the memory bits expected for fiscal 2027 are already under contract, and roughly two-thirds for 2028. CEO David Goeckeler describes the resulting demand visibility as extending beyond four years.

Should investors sell immediately? Or is it worth buying SANDISK?

The board has also put money behind its conviction. A new $14 billion share repurchase authorization brings total remaining buyback capacity to $15.5 billion, following $4.5 billion of repurchases in the fourth quarter alone. Operating cash flow for the quarter stood at $7.1 billion, giving the company ample room to fund the program.

Analysts Trim Targets but Largely Hold Their Ground

Wall Street’s reaction has been a study in selective caution. Citi cut its price target from $2,500 to $2,100, but analyst Asiya Merchant simultaneously opened a 90-day long position, framing the pullback as an entry point rather than a trend reversal. Goldman Sachs reaffirmed its buy rating with a $2,200 target; James Schneider there attributed the near-term weakness to revenue guidance coming in light, while noting earnings-per-share guidance was within expectations.

Elsewhere, the adjustments were more pronounced. Jefferies delivered the sharpest cut, slashing its target 42 percent from $3,000 to $1,750, citing potential inventory issues in the end-customer business and decelerating growth in the data-center segment. Mizuho lowered its target to $1,900 from $2,200, while Morgan Stanley and Wedbush held their positive stances at $1,750 and $2,000 respectively. RBC flagged the possibility that margins may be nearing their peak and that pricing growth could moderate. Barclays’ Tom O’Malley, meanwhile, described the selloff as an attractive buying opportunity.

A Technology Offensive and a Date to Watch

The company has not been idle on the technology front. Shortly before the earnings release, SanDisk and SK hynix published the first technical OCP specification for High Bandwidth Flash, a standardization step for high-bandwidth memory technology. At the FMS 2026 trade show, SanDisk showcased its new BiCS10 QLC NAND generation alongside the HBF technology, both aimed at large-scale AI inference workloads.

Investors now have a date on the calendar: August 13, when SanDisk hosts an investor day featuring Goeckeler and CFO Luis Visoso. One detail may give some pause in the meantime — the company has recorded no insider purchases over the past three months, but did see executive sales totaling roughly $10.9 million.

The central question hanging over the stock is whether the market will eventually pay a premium for consistent growth rather than relentless acceleration. SanDisk’s fundamentals are historically strong — revenue leaps, billion-dollar contracts, and robust cash generation. Whether that translates into a recovery in the share price will depend on the next few quarters and whether data-center demand maintains its current pace. For now, the market has decided that a record quarter is not enough.