SanDisk Shares Drop 8% Post-Earnings as Valuation Concerns Overshadow Record Results

Key points

• SanDisk shares declined approximately 8% in morning trading on October 30, 2026, following the release of first-quarter results that exceeded Wall Street expectations.
• The stock has risen 460% year-to-date, leading investors to scrutinize whether current valuations fully reflect future growth potential.
• First-quarter revenue reached $11.03 billion, up 378% year-over-year, surpassing the consensus estimate of $10.64 billion.
• Adjusted earnings per share came in at $49.51, compared with expectations of $46.22, while adjusted gross margin hit 85.1%, up 55.2 percentage points year-over-year.
• Datacenter revenue climbed to $4.80 billion, a 61% sequential increase, driven by AI infrastructure demand, while consumer revenue fell 29% to $397 million.
• The company announced an eight-for-one forward stock split effective November 19, 2026, and repurchased approximately 3.2 million shares for $5 billion during the quarter.

Background

This pullback follows a broader pattern in the memory sector, where strong earnings have not always translated to stock price gains. In late September 2026, SanDisk and Micron shares fell as investors assessed whether AI-driven demand could sustain high margins. Earlier in October, Micron shares also declined post-earnings despite strong results, reflecting market caution regarding AI valuations. The current sell-off in memory stocks, including Western Digital and Seagate, suggests a sector-wide reassessment of valuation multiples.

Why it matters

The divergence between SanDisk's strong financial performance and its stock price decline highlights investor skepticism about the sustainability of the memory sector's rally. While datacenter demand remains robust, concerns about valuation and uneven performance in consumer and edge markets may influence future investment decisions in the sector.

What to watch

Investors will monitor SanDisk's second-quarter guidance, which projects revenue of $12.2 billion to $12.6 billion and adjusted EPS of $55 to $57. The company's eight-for-one stock split, effective November 19, 2026, may also impact trading dynamics. Broader memory stock performance will depend on whether datacenter demand can offset weaker consumer and edge market trends.