# SanDisk beat on almost every number, and I still watched it sell off. Here's how I'm reading it.
SNDK reported fiscal Q4 2026 after the close on August 5, and the headline numbers were about as strong as this stock has ever printed. Revenue came in at $8.97 billion against a consensus near $8.4 billion. Non-GAAP EPS hit $39.25, well above estimates clustered around $34.50 to $35. GAAP net income landed at $6.9 billion, or $43.97 a share, versus a $23 million loss in the same quarter last year.
I still watched the stock fall. Nerves had already knocked it down about 5% during Wednesday's regular session, closing near $1,350. Once results dropped after the bell, the slide continued, pushing shares into the $1,250 to $1,300 range. Western Digital, SanDisk's former parent, fell even harder on its own beat that same evening, which tells me this reaction is more about the sector than anything SanDisk did wrong.
## Why I don't think the beat was ever going to be enough
Two things stand out to me. First, the stock had already rallied close to 600% year to date going into this print, so the bar I was watching for wasn't "strong quarter." It was "record quarter plus guidance that raises the bar again." Second, guidance for fiscal Q1 2027 came in essentially in line, with adjusted EPS of $44 to $46 against a consensus of $44.21. At this valuation, in-line guidance after a monster beat reads to me as deceleration, even while the dollar figures keep climbing.
The part I'm not dismissing is the datacenter story underneath the selloff. SanDisk disclosed $93.9 billion in minimum committed revenue from its New Business Model (NBM) contracts, 4.6 times its entire fiscal 2026 revenue. Management expects NBMs to cover half of bit volume in fiscal 2027, rising to roughly two-thirds by fiscal 2028. The board also added $14 billion to the buyback authorization, bringing total remaining capacity to $15.5 billion, close to 8% of the current market cap.
## My take
I don't think the fundamentals here have cracked. NAND pricing power, the NBM backlog, and the buyback capacity all still support the bull case as I see it. What I think the selloff is actually testing is how much of the AI storage supercycle was already sitting in the share price before results came out, and whether the growth rate can keep re-accelerating from a base this high. My guess is fiscal Q4 marks the peak of the surprise factor even as the dollar figures keep rising from here.
Sell-side conviction hasn't moved with the price action. 18 Buy ratings remain in place with an average target near $2,218, which implies substantial upside from current levels. That gap between where analysts sit and how the market reacted overnight is wide enough that I expect one side gets proven wrong over the next few quarters.
## What I'm watching from here
- Whether SNDK holds the $1,250 to $1,300 zone as support over the next few sessions, or breaks down toward the $1,150s
- What comes out of the August 13 Investor Day on NBM pricing floors and any new contracts signed since the print
- Whether Western Digital's parallel drop gets confirmed as a sector-wide re-rating rather than SanDisk-specific caution
I'm holding off on adding to my position until I see how SNDK behaves into the Investor Day. Curious how other holders here are playing this one, add on the dip or wait for guidance to firm up?
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