Should You Buy Sandisk Stock Before Aug. 5? (Hint: It Soared After the Past 2 Earnings Reports)

Sandisk (NASDAQ: SNDK) has had an unbelievable growth story this year. It was spun off from Western Digital in February 2025 in a fairly low-key restructuring, but by October, it had shot up, ending the year with a 650% gain. It has only continued to rise, and it's now up 3,810% since the spinoff.

The stock has soared after every one of the four earnings reports it has already posted, especially the last one. However, it's down 36% over the past month, trading around the price it was before the previous earnings report in May.

Should you buy Sandisk stock before fourth-quarter earnings results are released on Aug. 5?

Image source: Sandisk.

Memory is AI's hottest commodity

The large artificial intelligence (AI) companies have already posted big gains. These were the obvious winners, like semiconductor stocks and large AI platforms. Nvidia and Palantir Technologies are probably the best examples.

While these companies are still growing rapidly, investors have been looking for other big opportunities, and one of the areas they've landed on is memory. Data centers need massive capacity to power training and inference, and the inference component requires a large amount of memory to process all the information. While several types of memory play a role, including high-bandwidth memory (HBM) and dynamic random-access memory (DRAM), which both serve to store information, NAND flash memory is a critical component, and few companies produce it. NAND stores information in an offset and is therefore important for low-power-consumption data storage; as AI models move toward deeper reasoning and agentic AI, this kind of non-volatile memory is crucial to the process.

As one of the few NAND memory providers, Sandisk has seen accelerating demand and, consequently, increasing prices. That has led to fantastic operating results, especially in its data center category.

What could happen on Aug. 5

Sandisk's third-quarter results for fiscal 2026 (ended April 3) were phenomenal, with a 251% year-over-year increase in revenue, a 78.4% gross margin, and an operating income of $1.1 billion, up from $2 million last year. It also made a change to its operating model, launching the "new business model" of long-term contracts to try to stabilize what could end up being a volatile business cycle.

For the fourth quarter, management is guiding for about $8 billion in revenue at the midpoint, up from $1.9 billion last year, and an 80% gross margin, up from around 26% last year.

Those are pretty fantastic results, and it's likely that Sandisk will surpass expectations, as it has for the past four quarters.

So, you would think there's every reason to suspect the stock will soar on the news, and it might, especially because the stock is coming down. Sandisk was trading at a cheap P/E ratio of around 20 at the beginning of this year, but that ratio soared to 80 as the stock skyrocketed. That kind of valuation already includes some growth. At the current P/E ratio of 47, there's still room for the stock to rise on an earnings beat.

The bigger problem at this point might be fear about the future. AI stocks haven't been doing well as a category, since the market is worried about overspending. If clients pull back, Sandisk's unusual rise will come to an end.

I still think that there's room for Sandisk stock to jump after earnings, but investors need to be careful at this stage of the game. Many gains have been made, and as AI development continues to shift at a rapid pace, the winners and losers could change quickly. If you do want to invest in Sandisk's story, I wouldn't make it a prime position.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, and Western Digital. The Motley Fool has a disclosure policy.