Ben Pouladian
Founder of BEP Research, AI Compute Economics
Memory makers such as Micron and SanDisk have gotten too greedy, and like Apple's iPhone component suppliers, they will fade once volume takes over, as the margin went to Apple then. The capital flowing from crypto into these AI bottlenecks is telling. Per @MarceloLima, memory EBIT margins above Nvidia's gross margins stop making sense at some point, implying demand destruction, added supply or both. x.com x.comÂ
SanDisk CEO David Goeckeler's report of customer signals beyond fiscal 2030 adds storage to the long-duration AI hardware-demand case. He says those signals come through new-business-model partnerships; Micron and SK hynix in memory and Lumentum in photonics were already cited as signs of demand beyond 2030. x.comÂ
SanDisk benefits as agentic AI explodes context data. Most of that KV cache cannot live in HBM, so it spills to QLC NAND, which is slower but the only tier economical enough at that scale. x.comÂ
Sandisk's datacenter shipments and restrained bit-supply plan strengthen its growth case, without settling contract protection in a downturn. Management attributed roughly 60% of fiscal Q1 revenue growth to volume and 40% to price; datacenter sales rose 61% sequentially to $4.8B, supplying 88% of total growth. It retains mid-to-high-teens bit growth rather than accelerating supply. Consumer sales fell 29%, and the CFO cautioned against carrying Q2's growth rate into fiscal Q3. x.com x.comÂ
SanDisk's data-center flash growth shows AI inference is becoming a larger storage customer. Data-center revenue reached $4.8bn, up 61% in a quarter and over 40% of sales; total revenue of $11bn and EPS of $49.51 beat expectations. Guidance of $12.4bn revenue and $56 EPS suggests feared supply normalization has not yet eroded pricing. Overweight, with a $2,700 target. x.com x.comÂ
SanDisk is attractive purely as a QLC NAND play in data centers, even though its high-bandwidth flash (HBF) remains unappealing. x.comÂ
Sandisk's growth is coming entirely from higher prices, not more bits shipped, which makes it hard to sustain. Revenue grew 97% quarter over quarter as almost every hyperscaler raised capex to cover rising prices. Its roughly 80% gross margin is excessive and customers resent it; as long as demand far exceeds supply it can keep both, but supply eventually catches up and margins will erode. The open questions are how long new fabs take and whether Sandisk or rivals add the supply. x.com x.com … Show more
Agentic AI's repeated context favors cache memory and storage demand for Micron, SK hynix and Sandisk over fresh GPU computation. Per @demian_ai, about 95% of input tokens for DeepSeek V4.1 Flash on OpenRouter were cache hits; storage matters unless routing and caching keep almost everything in GPU memory. New products such as 3D DRAM and HBM-on-logic could be the final trigger for a full memory-stock re-rating. x.com x.comÂ
Sandisk's fast-growing data-center revenue strengthens its case among memory names with upside. Data-center revenue rose 61% quarter over quarter; revenue of $11.03B, adjusted EPS of $49.51 and adjusted gross margin of 85.1% all exceeded estimates. For upside among Micron, Sandisk and Kioxia, Micron ranks first, then Sandisk, then Kioxia, until further guidance. x.com x.comÂ
SanDisk's 2030 guidance has zero credibility, like Salesforce's or ServiceNow's long-range targets, and looks like its Oracle-RPO moment. A potential compute overbuild could arrive well before then, along with massive new memory capacity from everyone, including China. The guidance is still good for a big one-day gain. x.com x.comÂ
SanDisk is set for sharply higher enterprise SSD pricing. Samsung, SK hynix and SanDisk are believed to expect about 30% quarter-over-quarter eSSD price increases in CY3Q, to roughly 0.45 from about 0.35 in CY2Q. Samsung's floor price in long-term agreements is believed to be above 0.5. x.comÂ