Is The Ai Storage Boom Over? Why Sandisk’s Oct. 29 Earnings Could Prove The Doubters Wrong

The post Is the AI Storage Boom Over? Why SanDisk’s Oct. 29 Earnings Could Prove the Doubters Wrong appeared first on 24/7 Wall St..

SanDisk (NASDAQ:SNDK) reports fiscal first-quarter 2027 results Thursday, Oct. 29, after the close. Shares dropped 31.85% over the past month as skeptics called a peak in AI storage. The update will show if demand still exceeds supply.

Record Results Met a Sharp Selloff

Last quarter delivered another beat. Non-GAAP EPS of $39.25 exceeded consensus by 17.94%, and revenue rose 372% year over year to $8.965 billion, clearing management’s $7.75 billion to $8.25 billion guide. Non-GAAP gross margin hit 84.6%, up from 26.4% a year earlier.

Datacenter drove the story. Segment revenue reached $2.977 billion, up 103% sequentially, and management said bits will stay on allocation beyond calendar 2027.

The stock cooled anyway. Shares closed at $1,238.03 on Oct. 23, down from $1,816.57 a month earlier, as concerns about cooling hyperscaler capex and Chinese competition from CXMT spread across Wall Street. SanDisk remains up 421.54% year to date.

Wall Street Expects Another Giant Leap

Consensus EPS stands above the top of management’s $44 to $46 guidance range.

NBM Contracts and Pricing Will Settle the Peak Debate

I’ll be watching New Business Model (NBM) agreements first. SanDisk now has NBMs with eight Datacenter and Edge customers, representing a minimum of $93.9 billion in expected revenue at floor pricing. Management expects NBMs to cover more than 50% of bits in fiscal 2027, with gross margins “around 80%.”

New contracts or an update to the $91.1 billion remaining performance obligation would directly answer the peak-cycle crowd. CEO David Goeckeler said customers are giving “demand signals all the way out to the end of the decade.”

Pricing is the second test. About two-thirds of last quarter’s sequential growth came from higher prices, and TrendForce expects NAND prices to surge 235% in 2026. You should look at whether the 83% to 85% gross margin guide holds.

Edge deserves attention, too. Management expected smartphone and PC units to fall mid-teens this calendar year before recovering in 2027.

Guidance carries the most weight. Fiscal Q2 consensus estimates are $52.935 EPS on $12.21 billion in revenue, and options traders are pricing a 12.1% move either way. Last quarter, shares fell 6.81% on earnings day despite a beat.

A Chance to Prove the Boom Has Staying Power

SanDisk has spent a year arguing NAND has become a strategic AI component with multi-year visibility. Goeckeler said, “We want to get the boom-and-bust cycles out of it because that doesn’t work for anybody.” A $15.5 billion buyback authorization and a near-zero-debt balance sheet back that pitch. If new contracts and steady margins show up Thursday, I think the peak-cycle argument loses much of its force.

The post Is the AI Storage Boom Over? Why SanDisk’s Oct. 29 Earnings Could Prove the Doubters Wrong appeared first on 24/7 Wall St..