SanDisk

Q3 revenue exploded to 5.95 billion dollars, up 97% from last quarter and up 251% from a year ago. Gross margins jumped to 78.4%, an absolutely stunning 56 point improvement year over year. Earnings per share hit 23.41 dollars, and management guided next quarter even higher to 7.75 to 8.25 billion dollars in revenue with earnings up to 33 dollars per share.

Datacenter revenue rocketed 233% in a single quarter to 1.47 billion dollars, and 645% from a year ago, as hyperscalers race to lock in AI storage supply. SanDisk has now signed five multi-year supply agreements with major customers, transforming the business from volatile spot pricing to predictable long-term contracts. The company also paid off all its debt, ending the quarter with 3.7 billion dollars in cash and zero debt.

Memory pricing is the biggest reason results look this strong, and pricing cycles always turn. New NAND supply is not expected until late 2027 or 2028, but when it arrives, today's 78% gross margins will compress fast. Revenue grew 97% in one quarter, which sets a very high bar for future comparisons.

More than 60% of revenue now comes from just two segments tied to AI infrastructure spending, and any pause in hyperscaler buildouts would hit hard. Consumer revenue actually fell 10% this quarter, showing weakness outside the AI story. Samsung, SK Hynix, and Micron could also pivot more wafer capacity back to NAND if pricing stays this attractive, eroding the supply squeeze that is fueling these margins.