Sandisk locks in two thirds of next year's output

Sandisk Corporation has secured buyers for roughly half of its output this fiscal year and two-thirds of next year's output. The company signed ten long-term supply agreements with eight customers. These contracts establish committed volumes, minimum financial guarantees, and price floors and ceilings to shield the business from spot market swings.

Surging AI data center demand lifted quarterly revenue ending July 3 by 372% year-over-year to $8.97 billion, with data centers generating about a third of total sales. Sandisk swung to a quarterly profit of nearly $7 billion, achieving an 84.6% gross margin. Spun off by Western Digital in February 2025, the company entered the S&P 100 on September 21.

Backed by this contract backlog, management set targets for fiscal 2028 through 2030 of mid-to-high-teens revenue growth and adjusted gross margins of around 80%. Alongside its August results, Sandisk authorised an additional $14 billion share buyback program and pledged to return all excess cash to shareholders after reinvesting in operations.

Sandisk shares have gained more than 640% this year, leading the S&P 500, but closed on Friday roughly 24% below their June record. The stock trades at about eight times forward earnings. Industry competitors Samsung, SK Hynix, Micron, and manufacturing partner Kioxia are expanding output, raising concerns over potential future oversupply. Sandisk expects its next fiscal quarterly results in early November.