SanDisk pins forecast on New Business Models contracts

SanDisk's stock has climbed nearly 1,700% over the past year as its Datacenter business grew from roughly 12% of bits a year ago to 38% exiting fiscal 2026, with revenue up 175% over the last twelve months to $20.25 billion. Management is trying to move away from the boom-and-bust pattern that it says has "kind of tragic" implications if demand is misjudged, as in 2023.

Its answer is a set of multiyear contracts, called New Business Models, with eight Datacenter and Edge customers. These run over four years on a weighted average and are expected to cover more than half of bits in fiscal 2027 and about two-thirds in fiscal 2028. Pricing within these contracts has fixed and variable elements, with the variable part held between floors and ceilings, and management expects attractive margins even at floor pricing. The rest of the business still floats with the market.

Whether the forward multiples prove cheap may hinge on whether flash prices hold or slide toward those floors, and whether floor-price margins carry the forecast. The wide $179.38-to-$331.57 range of fiscal 2028 analyst estimates suggests the central expectation is not yet settled.