Sandisk’s AI-driven Datacenter expansion and NBM contracts are transforming a cyclical NAND supplier into a debt-free, high-margin infrastructure compounder.
Overview
Sandisk is a newly independent NAND flash memory and storage-controller company following its February 21, 2025 separation from Western Digital. Its strategic mix is shifting toward premium enterprise SSDs and AI infrastructure: fiscal 2026 revenue reached $20.25 billion, up 175% year over year, with Datacenter revenue growing 437% to $5.15 billion, Edge revenue rising 195% to $12.16 billion, and Consumer revenue increasing 29% to $2.94 billion. **The key structural change is the New Business Model (NBM), which provides multi-year committed volumes, pricing corridors, prepayments, and minimum guarantees across eight customers, covering roughly 50% of fiscal 2027 and two-thirds of fiscal 2028 bit shipments.** Q4 fiscal 2026 revenue was $8.97 billion, up 372% year over year, while non-GAAP gross margin reached 84.6% and non-GAAP diluted EPS was $39.25, beating consensus by 17.59%. Sandisk ended the year debt-free with $4.76 billion of cash, $11.49 billion of FCF, and a remaining $15.5 billion buyback authorization. At $1,786.60, valuation is demanding at 24.18x normalized trailing earnings and 12.56x sales, but the report argues recurring contracted infrastructure economics justify a premium. Near-term catalysts are BiCS10 and QLC execution, fiscal Q1 2027 guidance of $10.30–$10.80 billion revenue and $44.00–$46.00 EPS, and buybacks.