Should You Buy Sandisk Stock Before It Reports Earnings on Aug. 5?
Key Points
Sandisk has a recent history of substantial beats and raises, which bodes well for upcoming results.
Micron already delivered earnings results that blew past bullish expectations, suggesting that Sandisk might do the same.
Alphabet raised its capital expenditures target to up to $205 billion this year, showing that tech giants are still spending heavily on AI infrastructure.
Sandisk (NASDAQ: SNDK) has been one of the hottest growth stocks of the year (up 579%), but it's down by more than 31% from its June 2026 all-time high. Where does that leave investors heading into Sandisk's Aug. 5 earnings report?
There are some hints that Sandisk will deliver blockbuster results when it releases its report. These are the green flags investors should keep in mind as Aug. 5 draws closer.
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Micron usually foreshadows Sandisk's earnings
Memory chips are gaining substantial traction, and Micron Technology (NASDAQ: MU) proved that was the case when it reported its fiscal 2026 third-quarter results. These results are a pretty big deal for Sandisk investors since the company has been growing faster than Micron in recent quarters.
Micron more than quadrupled its revenue year over year, crushing its guidance in the process. The memory chipmaker also delivered more than 70% sequential growth. Guidance only suggested $33.5 billion in revenue at the midpoint, which would have been approximately a 40% sequential improvement.
With this important context, let's take a closer look at Sandisk's results for the fiscal 2026 third quarter, which ended April 3. Revenue almost doubled sequentially, outpacing the growth rate Micron exhibited in its groundbreaking quarter. For Q3, Sandisk implied $4.6 billion in revenue at the midpoint of guidance and ended up reporting $5.95 billion.
Sandisk guided for $8 billion in revenue at the midpoint of its fiscal 2026 fourth-quarter results. Recent history and Micron's results suggest that Sandisk will smash guidance. Micron's $41.5 billion in revenue shocked the most ardent bulls, and the company then guided for $50 billion in the following quarter.
If Sandisk continues to follow the pattern of crushing guidance, its recent dip looks like a compelling buying opportunity.
The memory chip boom isn't fading
Memory chips are cyclical, and supply shortages can quickly turn into inventory gluts. That has been the narrative for multiple decades, and it may explain why memory chipmakers saw their share prices drop just after Micron reported earnings, but the AI build-out is quite exceptional.
Companies with real revenue and rising AI capacity needs are fueling the boom, which makes the dot-com comparison illegitimate. Furthermore, Micron announced it was entering multiyear strategic agreements with customers. This multiyear setup makes the company less susceptible to the bust part of the memory chip cycle. Competitors like Sandisk are likely to follow suit, which can make the current dip attractive.
Moreover, Alphabet boosted its capital expenditures target yet again. The company intends to spend up to $205 billion on capital expenditures this year, and some of that money will have to go to memory chips like the ones Sandisk creates.
These are long-term tailwinds that should continue to propel Sandisk stock to new highs. Expect a beat-and-raise type of quarter. It's just a matter of how much Sandisk beats its guidance for Q4 and what the company tells investors about its upcoming fiscal 2027.
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Micron Technology. The Motley Fool has a disclosure policy.