Sandisk Surged 22% After Micron’s NAND Flash Signal — What Wednesday’s Report Could Mean for the Stock

Key Points

• Micron’s NAND flash sales nearly doubled sequentially in its fiscal third quarter, reaching $9.9 billion.

• Sandisk guided for an adjusted gross margin of 83% to 85% this quarter, versus 84.6% last quarter.

• Sandisk gave back its entire post-report gain within a week.

Sandisk (NASDAQ:SNDK) shares climbed 22% on June 25 — despite the company reporting nothing that day.

Micron Technology (NASDAQ:MU) had released its fiscal third-quarter results after market close the prior day, sending Micron’s own shares up roughly 16%.

Why would Sandisk move more than the reporting company? Micron’s results offered an early, detailed window into what memory makers were charging for NAND flash — the chips that store data in phones, PCs, and data center drives. And everything Sandisk sells is built on NAND.

Micron reports again on Wednesday, Sept. 30, with the conference call set for after the market close. This time, Sandisk enters the report near $1,688 as of this writing, about 28% below the $2,354 peak it hit in June.

Shares were down roughly 5% on Monday after OpenAI announced it had paused training its most capable AI models.

Image source: The Motley Fool.

Micron’s NAND news mattered more to Sandisk

Most of Micron’s business is DRAM, the memory that works alongside processors. NAND was just 24% of Micron’s revenue in the three months ended May 28.

But that slice carried the news Sandisk investors cared about. Micron’s NAND sales rose 99% sequentially to $9.9 billion, with average selling prices jumping in the mid-80% range while bit shipments grew only in the mid-single digits. That followed an 82% sequential increase in fiscal Q2, when NAND prices rose in the high-70% range.

In short, flash price gains kept accelerating that spring. Investors heard the news roughly six weeks before Sandisk reported its own fiscal fourth quarter on Aug. 5.

Sandisk’s report confirmed the trend. Revenue in the quarter ended July 3 climbed 51% sequentially to $8.97 billion, up 372% year over year.

Only about a third of the sequential gain came from shipping more flash; higher prices accounted for the rest.

But the June rally didn’t last. Sandisk closed at $2,335 on June 25 and at $1,745 on July 2 — below where it sat before Micron reported.

Overlapping quarters

Micron’s fiscal fourth quarter spans 14 weeks and ended in early September, covering the summer months of June through August.

Sandisk’s current quarter began July 4, meaning Micron’s figures cover roughly two months of it — months Sandisk likely won’t report until later this fall.

Sandisk has already signaled slower growth. Management guided for fiscal first-quarter revenue of $10.3 billion to $10.8 billion, roughly 15% to 20% above the fiscal fourth quarter. It also guided for a non-GAAP (adjusted) gross margin of 83% to 85%, versus 84.6% last quarter.

Revenue still growing while the margin stays flat suggests Sandisk expects price gains to slow considerably from the spring’s pace. Micron’s Wednesday report gives an early outside check on that.

What matters most for Sandisk on Wednesday?

Most helpful: how much Micron’s NAND prices climbed in its fiscal fourth quarter. After two straight quarters of increases over 75%, a smaller gain would still signal strength — but a big slowdown could suggest the pricing behind Sandisk’s 84.6% gross margin is leveling out.

Micron’s data center drive business matters nearly as much. Its data center SSD revenue passed $5 billion in fiscal Q3, more than doubling from the prior quarter. That’s the same market behind Sandisk’s fastest-growing business, where revenue climbed 103% sequentially in the fiscal fourth quarter to around $3 billion, or about a third of all sales.

In June, Micron also said it expected supply to stay tight against demand for both DRAM and NAND past calendar 2027, with NAND supply squeezed further as suppliers shift cleanroom capacity from NAND to DRAM. Any softening of that outlook could hit Sandisk harder than Micron, since Sandisk has no DRAM business to fall back on.

Judging from Sandisk’s valuation, investors already seem skeptical that current flash prices will hold. At around $1,688, the stock trades at roughly 23 times trailing earnings.

Annualize the $44 to $46 of adjusted earnings per share management guided for this quarter alone, and the stock trades at under 10 times earnings.

In the end, one Micron report won’t reveal how long flash prices stay this high. But its NAND numbers span most of the quarter Sandisk is now finishing, and in June, that was enough to move Sandisk more than Micron itself. This time, follow what Micron says about NAND prices more closely than how either stock trades the next day.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.

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