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Sandisk shares surged Friday after the flash memory maker delivered a standout earnings report and issued an outlook that underscored how aggressively artificial intelligence is reshaping demand across the data center market.
The company posted fiscal second-quarter adjusted earnings of $6.20 per share on revenue of $3.03 billion, comfortably ahead of Wall Street expectations. Investors focused even more on Sandisk's forward guidance, which pointed to a powerful continuation of the momentum seen late last year.
For the fiscal third quarter, Sandisk forecast revenue between $4.4 billion and $4.8 billion, alongside adjusted earnings of $12 to $14 per share. Both ranges landed far above consensus estimates, reflecting pricing strength and tight supply conditions for advanced memory products.
Shares climbed about 14% in heavy trading, adding to a sharp rally that has already made the stock one of the strongest performers in the broader market this year.
At the heart of the surge is booming AI-related demand. Sandisk said its data center business expanded 64% sequentially, as cloud providers and enterprise customers raced to secure flash storage needed to support large-scale AI workloads. That demand has outpaced new capacity, creating a supply crunch that spans much of the technology sector.
Analysts say the imbalance is giving memory suppliers unusual leverage. Several brokerages raised price targets on Sandisk, citing sustained pricing power and visibility into long-lived data center orders. One major bank noted that earnings appear well above historical trends and could remain elevated as long as AI investment stays robust.
The company also highlighted steps to secure supply over the long term, including an extended joint venture agreement with Japan-based partner Kioxia, pushing key flash chip supply commitments into the next decade.
Sandisk expects third-quarter gross margins between 65% and 67%, well ahead of typical industry levels, as higher prices and efficient production offset rising costs. Executives cautioned that the same shortages benefiting memory makers are creating challenges elsewhere, with consumer electronics and hardware companies increasingly competing for limited components.
Even so, Sandisk's results reinforced a clear message for markets: memory has become a critical AI bottleneck, rewarding well-positioned suppliers globally.
