SanDisk Slumps on Soft Guidance: Should You Buy the Dip With ETFs?

SanDisk SNDK shares fell as much as 8% in after-hours trading on Aug. 5, 2026, after the flash memory and storage maker issued fiscal first-quarter revenue guidance that missed Wall Street expectations.

The company expects first-quarter revenue of $10.3 billion to $10.8 billion, below analysts' estimates of $11.16 billion, as quoted on Yahoo Finance. While gross margin reached a record 84.6% in the fourth quarter, management guided fiscal 2027 gross margins to 83%-85%, per the same source.

Q4 Results Top Estimates

SanDisk reported fiscal fourth-quarter revenue of $8.79 billion, ahead of the Zacks Consensus Estimate of $8.30 billion. The company said the growth was driven by roughly one-third higher shipment volumes and two-thirds higher pricing.

Adjusted earnings came in at $39.25 per share, comfortably beating the Zacks Consensus Estimate of $34.24. For the current quarter, SanDisk expects adjusted EPS of $44-$46, largely in line with analysts’ estimate of $45.58, per Yahoo Finance.

AI Demand Continues to Outpace Supply

Management said customer demand remains stronger than available supply and expects memory bits to stay on allocation through calendar 2027, meaning supply will continue to be rationed among customers.

The company has also expanded its long-term New Business Model (NBM) agreements since April, signing three new contracts and expanding two existing partnerships. These agreements have an average duration of more than four years, as quoted on Yahoo Finance.

AI Memory Boom Keeps Long-Term Outlook Intact

SanDisk, which was spun off from Western Digital (WDC) in February 2025, has been one of the biggest beneficiaries of the AI infrastructure boom, as high-performance memory has become a critical component for AI data centers. SanDisk shares are up nearly 390% year to date (as of Aug. 5, 2026).

Earlier this week, the company partnered with SK Hynix SKHY to unveil a new high-speed memory standard aimed at making AI chips faster and lowering data center costs, further strengthening its position in the AI memory market.

Should You Buy the Dip With ETFs?

The SNDK stock has a Zacks Rank #1 (Strong Buy). The stock has mixed valuation metrics. Its forward price/earnings ratio stands at 7.40X, lower than the 17.23X possessed by the underlying Computer- Storage Devices industry.

SNDK's earnings yield stands at 13.51% as of Aug. 5, 2026, versus the industry average of 4.66%. However, its price-to-sales (P/S) ratio is 16.04x, compared with the industry's 3.99x, suggesting the stock is expensive on this metric.

SanDisk's fundamentals remain strong. The massive year-to-date rally is likely prompting a valuation correction. Investors can use a basket or ETF approach to buy the dip.

SanDisk has considerable exposure in ETFs like Tema Memory ETF DISK, First Trust U.S. Equity Opportunities ETF FPX, and Invesco S&P 500 Pure Growth ETF RPG. While DISK invests about 17% of its assets in SNDK, FPX and RPG each allocate about 8% to the stock. A basket approach helps reduce company-specific concentration risk.

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This article originally published on Zacks Investment Research (zacks.com).

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