SanDisk’s Q1 2027 results topped analysts’ estimates, yet the stock slid 13.5% the next day.
Key points
- SanDisk’s stock dropped despite beating earnings expectations, reflecting broader market weakness.
- Revenue for fiscal Q2 2027 is projected at $12.2‑$12.6 billion, indicating slower growth than the 23% Q1 increase.
- Around 40% of Q1’s revenue growth stemmed from higher pricing; Q2 expects only modest price hikes.
- Data‑center sales surged 61% QoQ, while consumer revenue fell 29%, highlighting divergent segment trends.
Shares of SanDisk (SNDK) fell 13.5% on October 30, the session after the company released its fiscal Q1 2027 earnings, which beat consensus estimates. The broader market also slipped, with the S&P 500 down 1.8% that day, and peers such as Micron, Seagate and Western Digital each lost between 5.3% and 8.0%. Despite the drop, SanDisk’s stock remains up roughly 465% over the past twelve months.
For fiscal Q2 2027, SanDisk projects revenue between $12.2 billion and $12.6 billion, a midpoint roughly 13% higher than the $11.0 billion reported for Q1. While this signals continued growth, the pace is expected to slow from the 23% quarter‑over‑quarter increase recorded in Q1.
Quarterly earnings beat expectations
Management said about 40% of the Q1 revenue lift came from higher pricing, and the Q2 outlook includes only “modest” price increases. The company forecasts an adjusted gross margin of 84.5%‑85.5% for Q2, roughly in line with the 85.1% margin posted in Q1, and highlights that higher volumes and pricing helped raise the adjusted margin in the latest quarter.
Segment‑level results show data‑center revenue surged to $4.8 billion in Q1, up 61% from the prior quarter, while edge revenue reached $5.8 billion, growing 7%. Consumer revenue, however, fell 29%, a decline the company attributes to the market adjusting to higher pricing. Overall, fiscal Q1 revenue was 378% above the same quarter a year earlier and has risen each quarter since.
Revenue outlook for fiscal Q2 2027
SanDisk noted that roughly half of its fiscal 2027 output is already committed to customers, and about two‑thirds of its fiscal 2028 production is pre‑allocated. The firm also expects industry data‑center demand, measured in bits, to expand about 40% in calendar 2027, underscoring the importance of that segment to future growth.
The next earnings release, expected in January 2027, will reveal whether the modest price hikes and volume growth translate into the forecasted adjusted gross margin range. Investors will likely watch the margin figure closely, given the sharp rise in operating margin to 79.6% in Q1 2027 from 8.3% a year earlier.
Reader questions
Why did SanDisk’s shares fall after reporting earnings above consensus?
The decline coincided with a broader market sell‑off, as the S&P 500 fell 1.8% and peer storage companies also slipped, outweighing the positive earnings surprise.
What revenue range does SanDisk forecast for fiscal Q2 2027?
The company expects fiscal Q2 2027 revenue between $12.2 billion and $12.6 billion, about 13% higher than the $11.0 billion reported for Q1.
How much of Q1’s revenue increase was attributed to pricing?
Management indicated that roughly 40% of the Q1 revenue growth was driven by higher pricing.
Source: trefis.com
