SanDisk is cashing in on the AI infrastructure gold rush. The flash storage company's stock jumped 14% after reporting earnings that doubled Wall Street expectations, driven by an insatiable appetite for memory chips from AI data centers. While tech giants like Apple scramble to secure supply, SanDisk and other memory makers are riding a pricing wave that's sending margins to record highs - a classic supply squeeze that's flipping the usual chip industry dynamics on their head.
SanDisk just delivered the kind of earnings report that makes investors forget semiconductors are supposed to be cyclical. The company's fiscal Q2 numbers didn't just beat expectations - they obliterated them, with earnings per share coming in at $6.20 versus the $3.62 analysts had penciled in. Revenue jumped to $3.03 billion against a $2.69 billion forecast, sending the stock rocketing 14% in Friday trading.
But the real story isn't the backwards-looking numbers. It's what SanDisk told investors about the next three months. The company guided for Q3 revenue between $4.4 billion and $4.8 billion - a forecast that makes the $2.93 billion analyst consensus look almost quaint. Even more striking: gross margins are expected to land between 65% and 67%, miles ahead of the 49.3% Wall Street was modeling.
This is what happens when an entire industry hits a supply wall at full speed. Memory companies are seeing demand from AI data centers that's fundamentally different from traditional computing cycles. These aren't PCs or smartphones with predictable refresh rates. This is infrastructure spending driven by the belief that whoever builds the biggest AI training clusters fastest wins the next decade of tech.
SanDisk's data center business grew 64% from the previous quarter - the kind of sequential growth that's rare outside of nascent markets or severe shortages. And right now, it's both. Meta, Microsoft, and every hyperscaler with cash to burn are racing to secure memory supply for GPU clusters that can't function without massive amounts of fast storage.
The supply-demand imbalance is so severe that memory makers have essentially been given pricing power they haven't enjoyed in years. Flash storage prices have climbed steadily over the past six months, and companies like SanDisk aren't apologizing for it. When you're one of a handful of suppliers and your customers are in an arms race, you don't need to discount.
