- SanDisk shares closed down 4.9% after OpenAI's annual recurring revenue reached only $50 billion by end of September, versus $68 billion expected by market observers.
- The revenue miss raised investor concerns about AI companies' cash flow to fund memory chip purchases from suppliers such as SanDisk.
- Lynx Equity Strategies analyst KC Rajkumar stays bullish, forecasting memory supply will be significantly tighter in 2027 and 2028, which supports elevated chip pricing and SanDisk's margins.
- SanDisk revenue rose to $20.2 billion over the last twelve months from $7.4 billion a year earlier, with operating margins at 61.6% on AI-driven NAND demand.
- Higher prices drove about two-thirds of SanDisk's fiscal Q4 2026 revenue growth, according to management.
- SanDisk trades at 21.8 times earnings as of October 7, 2026, in line with the S&P 500, and sits 10% below its one-month high.
Quotes
“memory supply will be "significantly tighter" in 2027 and 2028”