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SanDisk (SNDK) delivered a monumental 2Q26 earnings report, solidifying its position not just as a storage provider, but as a critical linchpin in the global AI infrastructure build-out. Despite facing a high bar with shares already up 160% since December, SNDK easily cleared the hurdle, sending the stock soaring to new all-time highs. The company crushed expectations across the board and issued Q3 guidance that wasn't just a beat -- it was in a completely different ballpark than analyst estimates. This step-change in performance is driven by a structural shift in the NAND market, where SNDK is successfully transitioning from a commodity-cycle player to a high-margin AI powerhouse.

• Q2 revenue reached $3.03 bln (up 31% sequentially and 61% yr/yr), significantly exceeding the guidance range of $2.55-$2.65 bln.
• Non-GAAP EPS hit $6.20, a massive beat against the FactSet consensus estimate of $3.62.
• Non-GAAP Gross Margin expanded to 51.1%, a staggering 21.2 ppt jump from the prior quarter, driven by higher ASPs, favorable product mix, and unit-cost improvements.
• Data Center revenue jumped 64% sequentially, fueled by the rapid adoption of enterprise SSDs by AI infrastructure builders and hyperscalers.
• Edge Computing revenue reached $1.68 bln, benefiting from the AI PC and high-end smartphone refresh cycle requiring larger, faster NAND capacities.
• Consumer revenue stood at $907 mln, maintaining stability as the company prioritizes higher-margin strategic channels during a period of limited supply.
• Q3 Guidance is historic, with revenue projected between $4.40–$4.80 bln (vs. $2.93 bln FactSet consensus) and EPS of $12.00–$14.00 (vs. $5.11 FactSet consensus).
• The company is currently on "allocation" across all end markets, with demand expected to exceed supply through at least the end of calendar 2026.
• Western Digital (WDC) confirmed during their call that they intend to monetize their remaining 7.5 mln shares of SNDK before the one-year anniversary of the separation. While a large secondary sale can sometimes create overhang, WDC’s preference for a debt-for-equity swap or a structured secondary suggests a controlled exit.

Briefing.com Analyst Insight

SNDK's Q2 results confirm that the memory industry is experiencing its strongest upcycle in 30 years. The expansion of gross margins to 51.1%, and the projection of 65-67% for Q3, signals a structural reset in profitability. By moving to multi-year agreements, SNDK is effectively dampening the historical volatility of the NAND market. This transition is underpinned by the ramp-up of BiCS8 technology, which significantly lowers the cost-per-bit while meeting the extreme endurance requirements of AI training clusters. Crucially, management noted that AI data center demand is no longer a commodity play but a strategic architectural necessity, as high-performance NAND is increasingly required to eliminate the storage bottlenecks that hinder GPU efficiency. SNDK's decision to maintain disciplined CapEx while on allocation suggests they are prioritizing bottom-line expansion over market share grabs, a strategy that is clearly resonating with investors. The sheer magnitude of the Q3 EPS guide indicates that the AI appetite for memory is much larger and more immediate than even the most bullish models predicted.