Sandisk Says AI Is About to Make Data Centers Far More Storage-Hungry

Sandisk Corporation (NASDAQ:SNDK) stock surged over 16% Thursday after the company outlined its growth strategy and long-term financial model at its 2026 Investor Day.

The company laid out a strategy centered on AI-driven storage demand, a more flexible NAND technology roadmap and longer-term customer agreements designed to improve the predictability of revenue, cash flow and earnings.

Sandisk Targets Mid-To-High-Teens Revenue Growth

Sandisk expects revenue to grow at a mid-to-high-teens rate from fiscal 2028 through fiscal 2030, broadly in line with bit growth.

Under its long-term financial framework, the company expects adjusted gross margins of about 80% and adjusted operating margins of about 75%. Operating expenses are expected to represent roughly 5% of revenue.

Sandisk also expects adjusted free cash flow margins of approximately 50% after taxes, capital expenditures and working-capital requirements.

Chief Financial Officer Luis Visoso said the company plans to return 100% of excess cash to shareholders after funding investments in the business.

AI Inference Expands Storage Opportunity

Sandisk sees AI inference as a major long-term demand driver as rising token usage and KV cache requirements make data centers increasingly storage-intensive.

“The AI data center is expected to become dramatically more storage intensive, with the total available market for enterprise data center flash growing to 1.2 zettabytes by 2030,” the company said.

New NAND Strategy Targets Faster Product Development

Sandisk introduced a two-dimensional scaling strategy built around its CMOS directly Bonded to Array technology.

The company is also advancing its High Bandwidth Flash technology as a potential solution for AI inference workloads.

Long-Term Customer Deals Add Revenue Visibility

Sandisk is increasingly shifting toward what it calls New Business Model agreements. The contracts combine committed customer volumes, contractual protections, minimum financial guarantees and structured pricing.

The company has signed agreements with eight customers. They account for about 50% of Sandisk’s expected bits in fiscal 2027 and roughly two-thirds in fiscal 2028.

Price Action

SNDK Price Action: SanDisk shares were up 16.34% at $1564.00 at the time of publication on Thursday, according to Benzinga Pro data.

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